One of the most common questions I have had since being a realtor is “Should I buy a home, or should I rent?” The answer to this question is determined by your individual wants and needs. Below will be a few things to consider that may help you make a decision on buying or renting.
Buying
Buying a home has many benefits as well as things to consider.
Pros
- First pro to buying and in my own humble opinion the most important pro would be BUILDING EQUITY! The ability to sell your home sometime in the future and hopefully make money off of it is huge. You don’t have that possibility if you rent, you’d be helping someone else pay their mortgage so they can sell the home someday and make money off of it.
- Another pro is that it is YOUR house! No one can tell you what to do and where you can hang pictures or what color you can paint your walls!
- FIXED PAYMENTS, to an extent of course. Your mortgage may fluctuate up or down depending on taxes and insurance etc.
- STABILITY – You choose when you leave. You don’t have to worry about being evicted or told you need to leave with such little notice from your landlord.
Cons
- Maintenance and Repairs – It is your responsibility to maintain and repair anything on your property. There’s no landlord you call when the heater goes out.
- It could be more difficult to move. If your property wasn’t properly cared for during your tenure of ownership there may be issues selling a property that’s in rough shape. That may make it difficult to sell when the time comes.
- Chance of home value decreasing. Depending on how long you plan on staying in your new home there is always the possibility of the market shifting and your home could depreciate in value. According to Homeguides.sfgate.com the national appreciation values average around 3.5 to 3.8 percent each year. (Click link above for more info.) If you plan on buying my advice is to plan to live in your new home for at least 2 years.
Renting
Renting can be great for temporary living. Below I listed a few pros and cons to renting. If you read the pros and cons of buying that may have already given you a good idea of what’s to follow.
Pros
- Easier to relocate then buying. If you rent you don’t have to worry about the hassle of cleaning up the home, making any repairs and getting the home ready to be listed. No worries about offers or the entire process of selling your house.
- Less responsibility. If the heat goes out in the middle of the winter you can just call your landlord and it is their legal obligation to fix it within a few days.
- In some cases you don’t even have to worry about lawn maintenance or snow removal. You can just cozy up inside and watch movies all day as the snow falls.
Cons
- Rent increase. There’s a good chance every time you renew a contract your rent will most likely increase.
- Freedom. Your freedom to decorate the place as you would like could be limited. From paint on the walls as I mentioned before to pictures and nails in the wall.
- It’ll never be your place. You won’t be building equity for yourself. You’ll be building equity for someone else you profit off of you. You’ll never own the place you rent.
- Stability – You may need to relocate if you can’t renew your contract where your staying. The landlord will always have the power to tell you to find somewhere else to go if they really want to.
Summary
If you plan on staying somewhere for two years or longer, have the down payment you need, good enough credit to get preapproved and want to have the freedom and title of being a homeowner then DO IT. Don’t let fear be a determining factor, and certainly do NOT let the market be a factor. No one in this world can time the market. You’ll find yourself waiting years for the “right” moment to buy. Years you could’ve been building equity.
If you plan on staying somewhere temporarily for business or whatever reason, or maybe you don’t want the responsibility of owning your own place and making all repairs necessary, or maybe you don’t have the best credit at the moment or a large enough down payment then maybe renting is the better option for you.
Best thing to do is sit down, get serious about making a decision, write out any concerns and desires you have and see what is the most important to you.
