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Buying vs Renting Your Home

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This has become a common question we receive, “is it better to rent or to buy?” With current low interest rates and and reasonably priced homes on the market, often a monthly mortgage payment is in fact less than monthly rent payments in the same area. There is currently a competitive housing market which means home prices will be on the rise in the near future, but as home prices rise so does the cost of renting.

Buying a home may be the right investment for you to gain freedom and consistency. We find every situation is different and it will be up to you to make the correct choice for your lifestyle and financial situation, but here is some important information to help you make the right choice.

What are the main benefits of buying a home?

Investment

Real estate is typically a good long term investment. Investing in the purchase of a home means you are gaining a valuable asset in the long run. A fixed rate mortgage will mean consistent monthly home payments for the duration of the loan. This is compared to rental agreements which can increase every year.

Freedom

When you own your home, you can make changes, like hanging pictures, painting walls and renovations. If you want to own a pet, you can avoid additional stress of finding a pet friendly rental. You can have the freedom of making your home your own.

Consistency

Hopefully you plan to stay in your home for several years. This means a more consistent lifestyle for you and your family. No worries about moving frequently and your neighbors are more likely to be long term residents as well.

Home Ownership Means More Responsibility

Owning your home means you are responsible for maintenance, appliance replacement, and renovation expenses. Be sure that you are ready and capable of handling the responsibility of properly maintaining your home. There are additional expenses involved with ongoing maintenance, repairs or replacement.

Considering this, it is vital you purchase a home that fits within the parameters of what you can properly maintain. Our agents can help guide you in these decisions by helping you evaluate time, expense, and benefit of a homes features. For example, a large beautiful yard can be extremely attractive, but remember it must be maintained by you (the owner) or a paid landscaper.

Reasonable Financing is Everything

Many home listing websites have mortgage calculators, which use a standard interest rate to estimate payments including taxes and home owners insurance . Talk with one of our agents to find a reliable mortgage broker or lending company and find out what available interest rates would be for you. This will require a check of your credit. Poor credit = Higher Interest Rate. (Read this article on the home buying process.) Once you have an understanding of the monthly costs associated with a home purchase you can begin comparing to your area’s rental rates.

Here are a few points to consider when comparing your rent payment with a mortgage payment:

  • It is not recommended for your mortgage payment or your monthly rent to exceed 30% of your monthly income. Most lenders will not approve a mortgage over this percentage.
  • Condo fees or HOA fees may be required. Sometimes these include utilities, like cable or water, be sure to factor this into your budget.

Make the Right Choice for You

If home ownership is your dream, get as much information as you can. Educate yourself so that you can make an informed decision. Evaluate your commitment to home ownership. Consider how it fit into your lifestyle then contact us! We are happy to help you along the way.

Here is a useful Renting vs. Buying expense tool from Realtor.com.

Is renting the right path for you?

Take a look at our property search tools for finding rentals in your area!