With the arrival of a new bundle of joy, our cozy little condo in the swanky South Loop will become a tight fit in short order. The real estate market is soft and any sale of current properties will likely not bring much in profit. We can’t stay. So do we rent or do we buy?
Serious negotiations are currently underway. While no decisions have been made, I’ll let you in on the thought processes to date:
- Prefers to stay in the same area. For our budget, that means another condo.
- We can continue to share one (paid off) vehicle as he commutes using public transportation.
- Not a fan of shoveling snow in the winter or managing the maintenance of a stand alone, single family home.
- Prefers a yard for growing children.
- Looking for a larger home to accommodate future children and visiting guests.
- Not a fan of multiple outstanding mortgages.
The softer real estate market makes a new home purchase very attractive. However, there are some common factors to consider in each individual scenario.
Rent vs. Buy
- Can you put down a sizable down payment? 20% in most cases.
- Are you going to stay in the home at least 5 – 7 years?
- Can you afford the additional cost of homeownership (taxes, insurance, utilities, and maintenance for starters)
- Do you have stable employment?
- Do you have an emergency fund in place (not counting the down payment)?
Answering yes to the above questions can help you determine if you are better suited to buy or whether you should consider renting just a little while longer.
Just which decision will we make? I’ll keep you posted.