The housing market is a very challenging one, and many would even say it’s one of the most daunting purchases you can make. After all, once you get your mortgage down for the home, you’ll likely spend the next 20-30 years there.

That being said, should you buy a home or just rent a property? And if you do decide to buy, how do you make sure you get the best price for it? There are multiple tools you can use, but the most efficient one is a rent estimator.

Renting Vs. Buying

customer handshaking with a real estate agent

Many owners find home ownership a better solution, mainly because it helps them escape growing rent. Plus, it allows them to build equity in a place that will eventually be theirs. With that in mind, the decision will depend on several different circumstances, including the following:

  • How long do you intend to stay in the house?
  • How much can you afford, considering your plans for the future?
  • Available homes on the market
  • Current housing prices

If you don’t intend to stay on the property for a long time, then it might be more financially savvy to rent the home rather than buy it. However, if you have the budget and the market is on your side, then you might want to buy instead.

Bear in mind that the housing market is at a competitive point, with prices going record high. As a result, you must be aware that you may have to pay a price higher than what is listed on the website. You have to make sure that the costs of ownership are covered as well, so you don’t end up paying too much.

How A Rent Calculator Can Help

a person using calculator

Rented homes and purchased homes can have different expenses. As a homeowner, you will have to pay for the mortgage, along with the maintenance expenses, property taxes, and many more. When you are renting, the landlord usually takes care of these expenses. Sometimes, even the bills are covered – but usually, recurring costs such as insurance and taxes are included in the rent.

Very often, these additions to the price may not be visible to a person that just wants their own home to live in. You may end up buying a home similar to the one you previously rented out, only to find out that you are paying way more than you did before.

A rent estimator calculator will show you the costs that are usually included with a property, from maintenance to taxes and other similar fees. Once you get that information, you can compare it with the fees that you will have to pay for the house.

The majority of rent estimator calculators will have a rent vs. buy feature. There, you can see those fees in comparison and determine whether it’s worth buying a house or not. Moreover, rent calculators can list out multiple houses, so that you can find the perfect one that matches your previous rent.

A rent calculator can also help you if the house is purchased for investment purposes. For example, if you are planning to buy a home so you can lease it out, then a rent calculator can help you determine the average rent. Mix it with the ownership costs, and you will know whether a particular home is worth the investment or not.

Determining How Much You Can Afford

home for rent sign

Remember that buying a home comes with a few extra expenses that you would not have as a tenant. As a result, you need to take a good look at your budget and make sure that you can afford it. Look at your spending habits and your bank statements to see how much you are spending on bills. After that, take the rent calculator and see how much of that fits into the rent.

Once you have a good idea of how much you usually spend on your house, you can figure out a monthly payment. Ideally, you will want to buy a home where the monthly principal is lower or at least the same as your rent payment. This is because you need to cover expenses such as interest, maintenance, property taxes, insurance, and so on.

It is recommended that you do not spend more than 30% of your monthly income on housing fees. You need enough money to cover the debt, such as electricity bills, water, food, and your regular home maintenance.

The Bottom Line

Rent calculators are not only good for finding a place to rent. They are also great for buying properties. If you are a tenant but want to become a buyer, a rent estimator calculator can help you compare prices and choose a home that fits your budget. This ensures you can find the home of your dreams while not causing a strain on your budget.

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