Location is one of the most important things that one can look into when looking for a specific property. When looking into the location one can look into nearby schools, amenities and transportation options, and future appreciation potential. It is also very important to look into the crime rates of the location to make sure that one will be secure wherever you are.

There are numerous distinctions between renting and purchasing property. When you rent a house, you don’t have all of the responsibilities of homeownership, and you have more flexibility because you aren’t tied down to your home. You know exactly how much your monthly rent will be when you rent. This figure is already included in your lease, so you can plan accordingly. If you rent, you can move whenever your lease expires. You may be forced to relocate immediately if your landlord decides to sell the property.  In addition, having your own home and being able to make decisions about the look and design of the area, owning a home provides a sense of stability and pride of ownership. Even if your mortgage payment is less than your rent, owning a property has a higher overall cost than renting.

The 5% rule is an estimation of the three costs that homeowners face that renters do not. Property tax and Maintenance cost are both considered to be 1% each of the values of the house and the cost of capital is assumed to be 3%.