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“Ask The Experts” is written and provided by Scholarship Media. It does not reflect the views of The Collegian or its advertisers.
I like the career prospect of job hopping. Should I rent or buy a home when I change jobs?
The rent or buy debate has been raging for years. There are clear pros and cons for each scenario and a lot will depend on your financial situation. Renting or buying a property is a life-changing choice and depends on more than job hopping.
Millennials were fortunate enough to escape the housing crisis, and were not really affected by it. They comprise the largest group of home buyers and are primarily first time buyers. According to reports, this demographic represented 45% of all purchase loans earlier this year. Research indicates that Millennials are likely to purchase a house at the age of 32 and spend over $140,000.
The primary arguments for buying your own property are to avoid wasting money on rent and secure an investment at a young age. It will be the largest single purchase you make and change your life and financial status. Buying at a young age seems like a huge burden, but with property appreciating it will provide financial freedom later.
Once on the property ladder, you can trade up to a bigger house as your family expands. On average, buyers stay in their first home for around eleven years. It is a lot harder to jump straight into a larger more expensive property as a first-time buyer.
Job hopping is not really a hindrance to owning your own property as you can rent it out if you leave the area. This offers rental income that could cover the mortgage and possibly give you extra profit. You will of course have the additional burden of taxes and maintenance. If you do not live in your own home, you may need to pay an agent to help you manage your tenants.
If you consider that your rent could be put towards a mortgage, buying will not put you in a worse situation financially, but involve a bigger commitment. Renting gives you freedom of movement, if you continually change jobs, but you will never build equity from owning your own place. Selling a property also takes time, since real estate is no longer as liquid as in previous decades, and prices can go down.
Home ownership builds your equity, when you rent you are building someone else’s equity. Buying a house teaches you about financial planning and responsibility. It is a huge obligation but one that will hopefully pay dividends in years to come.
“Home is the nicest word there is,” Laura Ingalls Wilder.