As interest rates remain uncertain and inflation seems yet to cool anytime soon, the debate about renting or buying a home intensifies. During the pandemic, when stimulus money and historically low interest rates fueled a frenzied housing market, the opposite has been the case recently with inventory for homes staying put.
As people rushed to get into the housing market for either the first time, or selling to move into another property altogether, many are now back on the outside looking in. But recent reports have showed that renting can be a sound option for families in many areas. Renting can be a solid path to homeownership, and with a few steps the dream of owning a home can become a reality.
Budget now to get to where you want to be
Knowing and understanding your budget is a solid first step in using this time as a renter to solidify your finances. Understanding where your money is going and why can give you a head start in seeing how much money you have left over at the end of the month that can be stowed away. There are a litany of apps that can assist with this, giving you real-time information at your fingertips.
Increase your yield with an online savings account
After you’ve found the sweet spot in your budget for savings, consider opening a high-yield savings account where you can store it and earn interest with no fees or deposit limits. Some traditional banks offer very low interest rates for their savings accounts, when customers could be drawing greater returns by using online banks or other entities. Finding an account that works for you and your needs is one of the easiest ways to let money grow and work for you.
Stay on top of your lease
In many cases, signing your rental agreement at the start of a lease is a one-time event. Whether you are in an apartment complex or with an individual landlord, keeping that initial document is important. The length of the lease and if it can be changed, how the lease is structured and exit clauses are all important parts of the agreement and it’s always good to know the rules should you explore exiting at some stage and buying a house in the future.
Look around and find what works for you
With a long-term view of the ebbs and flows of the market in your area, you can strategically target the places that have the type of house you want. Understanding the trends of a city can go a long way in helping determine the places that fit what you’re looking for. For some, starting small by purchasing a property and letting it appreciate over time is a good way of taking that initial investment and getting you into a home that may be there for the long term.
By using some of these steps, renting can be an advantageous opportunity to set yourself up for when the opportunity for homeownership comes along later. As a renter, you also have the ability to protect the things that matter most by having quality insurance that covers you when you need it. Contact us today to get a quote in minutes.
Please Note: This article is for general informational and educational purposes only. It does not represent any specific insurance policy and does not modify any provisions, limitations, or exclusions of any current policy.
