I really want to have a sustainable finance and I plan to move into my own home as soon as I can because I feel that the rent might be taking away money from me on a yearly basis, but I can actually move into my own home and simply say good bye to yearly rents.
Do you consider my decision a good financial decision?
Making a decision between buying and renting a home is decisive on the region we live. In some areas it is financially wise to rent while in other areas it is better to buy your home, the way to calculate the decision you are about to make is by calculating the P.R ratio of the region and here is how it is calculated.
The amount of the house for sale divided by the amount of house for rent multiplied by 12, according to financial experts, if the PR ratio of a geographical location is above 16, then it is safer to rent a home.
For example: if the amount required to buy a home is $250,000 and the amount to rent a home in the same geographical area is $1,000, the P.R ratio will be:
250,000/1,000 X12 =20
Experts also advice that it is financially wise to keep every of your housing expense below 30% and this is also something to consider before you make a decision between either buying a house or easing a house, Sometimes a new job might take you to an area where housing expenses are quite expensive and because you are financially wise you are not ready to spend every of your new salary on rent, here are things you can do.
You could get a nearby accommodation where the rents are low but in calculating that, you have to also calculate the transportation cost, if it is worth the amount on transportation as well as the daily stress.
You can decide to stay in the expensive region that is really close to work and get a roommate to spill the bills with which will save you from long distance journey and getting late to work every day.
But this renting decision is only a smart choice if you are investing the money you have to bring about better returns compared to what buying a house will be able to offer.
Become financially wise and make better decisions, thanks for reading. I am @oluwatobiloba.
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