If you know that you will be inheriting a house in several years, by all means wait. However, if you in heritance is a long way off buy now and inherit later. Owning two houses and renting out one is the first step toward becoming a real estate entrepreneur. If after considering the pros and cons of buying, you’re still more comfortable renting, and then do so. But if you’ve decided to buy then you need to know the dollars and cents involved.
Before getting into real estate you should know that there are two basic costs involved in purchasing a home: the initial cost—what will you have to spend right off the bat, such as the down payment, closing costs, moving expenses, utility deposits, and other star-up expenditures and the ongoing costs—what you will pay every month—which will include mortgage payment, utility bills, insurances, taxes, and you also have to calculate the cost of home improvement. Most of these costs have increased in recent years, so be sure to these increases into your housing budget.
The rule of thumb traditionally has been that you should look for a house that cost no more than two and a half times your gross annual income, and plan to spend no more than 25 percent of your average monthly income on housing expenses, including mortgage payments. These rules change, however, defending upon the economy, your personal situation, and the property involved.