When thinking about getting your first place to live or you just plan on moving, you often think to yourself if it’s more beneficial to rent or buy. While both have their upsides and downsides, it’s up to your situation to decide what you should do in the future.

When looking to buy or rent, you’re going to want to ask yourself a few questions. From there, you will get a good idea what you should do. A few questions you should be asking yourself is –

How long do I plan on staying in the area?

How much money do I have saved?

Does the area have a good real estate future?

If you plan on staying in the area for a good five years or so, you should look at purchasing a home if you can afford it. Renting is typically a lot cheaper seeing most complexes will pay a majority of your bills such as trash, heat, water, etc. With a home purchase, you will be responsible for everything, including your repairs.

One of the most important things homebuyers don’t think of is the money they have on hand. It’s important that you have a good amount of money saved up in your accounts. Most experts will say that you will want at least six months of expense money, just in case something bad happens such as a job loss, etc. The same goes for a mortgage down payment. The more you save and put down on your house, the less your monthly payment is going to be.

When looking at mortgage pricing, it’s safe to say that your mortgage payment shouldn’t be more than 30% of your take home pay for the month. If you take home $4,000 a month, you shouldn’t be paying more than $1,200 on your mortgage. Keep in mind that the $1,200 isn’t going to be your only bill. You will want to take your mortgage and add about 40% to get a good idea on what you’re paying.

A lot of the times you can find very nice rental homes in the same area you want to buy for a very reasonable rate. The nice thing about renting is that you’re not glued to the house and can pick up and leave at any time, as long as you don’t break the contract. You will also not be responsible for home repairs, etc. The biggest downside to renting though is you’re typically “throwing away” your money each month. A home purchase is considered an investment.

When purchasing your home, you will want to look at where the market is headed. You will want to take a good look at the neighborhoods and what your home will be valued in the long run. If they plan on building new retail units nearby, etc., this can all bring up a home’s value.

With renting, you don’t have to do as much research. You just need to scope out the area and if you don’t like it, you can pick up and leave, it’s that simple! Renting is geared more toward the people on the move or the people who don’t typically have enough to afford a mortgage just yet. If you’re renting, it’s a lot easier to save for a home, so don’t think it’s a bad thing when you’re doing so.

Renting and Buying is completely up to your situation. Just simple answer a few questions above and you’ll be able to take the right path. Just keep in mind that home buying is a whole another game in itself and will be the biggest purchase you ever make.