The decision to buy or rent a home in the United States (or anywhere) is one of the most significant financial choices many individuals and families face and that's only made more difficult if you're not in your home country.
So what should you take into consideration?
What is your Financial Situation?
Your current financial situation plays a crucial role in determining whether to buy or rent. Buying a home typically requires a substantial down payment, closing costs, and ongoing expenses like mortgage payments, property taxes, and maintenance.
Renting, on the other hand, often involves lower upfront costs, making it a more accessible choice for individuals with limited savings or fluctuating income.
For international expats, it's also important to consider where your money currently is and taking into account exchange rate fluctuations. With larger amounts, minor changes in percentage of the $USD can have a large imapct on your savings, so be sure to time things properly and have a buffer.
Long-term vs. Short-term Plans
Consider your long-term plans when making this decision. If you plan to stay in one place for several years, buying a home can be a wise investment, allowing you to build equity and potentially benefit from property appreciation.
However, if you anticipate relocating frequently or are uncertain about your future plans, renting offers greater flexibility without the commitment of home-ownership.
For those on a visa, this means considering what might happen if your visa expires, if you lose your job, or if you lose your status in the United States. These can happen unexpectedly and you need to plan for what might happen if this is the case. Have contingencies in mind and know that selling from abroad may be incredible difficult.
Consider Current Market Conditions
The real estate market varies enormously not only within cities but also across the United States. Before deciding whether to buy or rent, research the local housing market in your desired location.
In some areas, it may be more financially advantageous to buy, even for a short-term investment, due to lower home prices and favorable interest rates, while in others, renting might be the more affordable option.
Also take a note of your internal conditions: How are your family? Will there be any future considerations in the long or short term for care of yourself or others? Will you need to move back to your home country for a short or long time in the future?
What's your Monthly Budget & Credit History
The first and best step is to calculate your monthly budget to determine what you can comfortably afford.
Compare the monthly costs of owning (mortgage, property taxes, insurance, and maintenance) with renting (rent and utilities). Keep in mind that home-ownership includes more fixed costs, while renting provides greater predictability in monthly expenses.
Take into account the impact of having to pay that in a foreign currency, and ensure that you have left yourself significant budget for what might happen if you need to leave in a hurry due to immigration or other personal issues.
More importantly though have a look into your credit history and what you will be able to spend and borrow, as in the US this plays a huge role in how the banks will see you as a liability and may make loans more difficult than you are used to.
Are you wanting an Investment?
Home-ownership can be viewed as an investment that builds equity over time. If you believe that real estate values in your area are likely to appreciate, buying a home can be a way to grow your wealth. Renting, on the other hand, allows you to invest your money elsewhere, potentially earning higher returns.
Ultimately his comes down (again) to your long-term plans and whether you plan to stay put or at least nearby in the future.
This can also mean considering the tax and accounting impacts of investing in the United States compared to your home country. If your long term plan is to move back to your home country, maybe investing there is the smarter choice? Be sure to review all yoru options!
What's your Risk Tolerance
After making your budget you should assess your risk tolerance. The real estate market can be unpredictable, and the value of a home can fluctuate. Renting provides more stability in this regard, as you won't be directly affected by market fluctuations both in-country and out-of-country.
Do you need help finding a rental or new home?
There is no one-size-fits-all answer, as what works best for one person may not be suitable for another. It's essential to evaluate your unique circumstances and priorities to make an informed choice that aligns with your goals and aspirations.
Consulting with a financial advisor or real estate professional can also be valuable in helping you navigate this important decision.
America Josh has partnered with real estate broker, Rosa Murphy, who can help you find the perfect rental, short or long term, furnished or unfurnished. Rosa has over 30 years experience renting and selling Manhattan and Brooklyn real estate, mostly to foreign nationals, and she also just happens to be married to an Aussie!
Rosa understands the difficulties in moving to a new country and will go above and beyond to help find you the perfect place. While Rosa specializes in New York property she has reputable colleagues that she can connect you with all over the US.