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It's common practice to relocate for work, and if you're lucky, your employer will help pick up the tab for moving so you're not bearing that expense on your own. But what happens once you arrive in your new city? Your employer may be willing to cover the cost of temporary housing while you get on your feet, but after a month or so, it'll probably be on you to find a living space of your own.
At that point, you may be tempted to buy a place rather than rent. After all, when you own property, you get the chance to build equity rather than throw your money away paying somebody else's mortgage. But while owning over renting makes sense in a lot of scenarios, this is one instance where you may want to rent first and hold off on buying.
Sometimes, it pays to rent first
When you rent a home, you can often sign up for a one-year lease with the option to move out once those 12 months conclude. When you buy a home, it's a much longer-term commitment -- and that could be a problem when you relocate for work.
If you move to a new city for job purposes and find that you really hate living there, the last thing you want is to be stuck somewhere that doesn't suit your lifestyle or taste. But if you buy a home right away after relocating for a job, that's what might happen.
Similarly, if you're new to the job or company in question, it really pays to make sure you a) like it, and b) are in a stable position before buying property. You might accept a job offer thinking it will be your dream role, only to find yourself miserable on a daily basis once you really learn how your company works. If that's the case, you'll want the option to look for work elsewhere -- but if you're tied down to a home, you'll limit your options.
Similarly, you might realize six months in that your company is having financial trouble, causing your job to be compromised. At that point, you may prefer to find a new job in your former city -- but if you buy a home in your new city, you may find yourself stuck where you are.
Although renting might seem like throwing money away, it's a good bet when you've moved to a new locale for job purposes more so than a love of the area itself, and you're only just getting settled in that job. Remember, there are closing costs associated with buying a home, and you generally need to live in your home for two years or more to recoup them. If you buy a home as soon as you relocate but need to sell it a year later, you could easily lose money off the bat.
Therefore, don't rush to buy. Instead, give yourself time to adjust to your new circumstances, and hold off on homeownership until you're certain you like where you live and things are stable on the employment front.
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