Often times, renting before buying isn’t an option. You don’t always have the ability to do so. Many times you have to rely on your own best judgment, or the reviews others have given on a product.

Although people may not necessarily think of it, renting before buying a house may be an option. Not renting the house you will likely end up buying of course, but you may be able to test the waters first, especially if you are making a big change.

What do we mean by this? A big change can be a move to another city or state, extreme downsizing or scaling up, etc. Purchasing a house is a big commitment. If you are making a big change from what you’re used to, jumping right in may not be the best idea. If you buy and decide you’re unhappy with the change, it’s difficult, time-consuming, and often financially infeasible to move again.

However, you may want to look into testing the waters first. If you are moving to a new city or state that you are unfamiliar with, rent for a while, either an apartment or a house, to get to know the area. You may find there are neighborhoods you prefer, or others you decide you never would want to live in. If you buy right away, you may end up in one of those unwanted areas before you give yourself a chance to find out.

For extreme downsizing or scaling up in size, you will probably have more limited renting options. Holly Johnson over at Get Rich Slowly tells about her own experience in downsizing, and why she and her family decided to rent a house before buying in the post “The Small House Experiment – Part 1.”

Johnson discusses selling her home too quickly, and after searching for an equivalent sized home closer to her husband’s new job, they decided maybe it was time for a change. Maybe they didn’t need so much space for their family. Since they had run out of time to get out of their current home, they began renting a home more than 1,000 square feet smaller than their previous home. This “experiment” will tell them how they handle living in a smaller space and will allow them to decide if it’s what they really want to buy.

Obviously, this may not be as easy of an option as renting a temporary apartment in a new city. There may not be a rental home with the size or features available where you are looking to move. Or maybe the place you are looking to rent wants too long-term a commitment for your plan. But it may make sense to look, especially if you are having any doubts about what kind of house you are looking to buy.

Renting before buying a home isn’t necessary for everyone. And sometimes it doesn’t make financial sense or isn’t an available option. But if you find that it is something you might want to do, make sure to do your homework about your rental and not get involved in something too rigid (like signing a one year, hard to break lease when you plan on buying your home in three to four months).

 

  • Disclaimer: The information on this blog is not meant for specific financial advice. The ideas/opinions stated are not suited for everyone, and readers should use their own judgment in applying them in their financial lives.
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