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There is a lot to think about when it comes to the decision to buy or rent. Some simply don’t want the responsibility that comes with owning their own home. Others are tired of paying rent without building equity. The decision to buy or rent can depend on a variety of factors including personal finances, interest rates, housing prices, flexibility and location. Here is a closer look at when you should consider buying over renting.
Need for Flexibility
Perhaps more than anything, whether you should buy or rent will depend on your need for flexibility. If you are at a point in your life where you want stability and plan to stay in the same location, buying could be the way to go. If you may change jobs, get married, have kids or are unsure of where you will be in a year or two, renting is probably the better choice.
Low interest rates are a great pathway for buyers entering the market. This can mean a more affordable house or more house for the money. Renters rarely get a break when interest rates are low, but that can be very beneficial for buyers. If you are looking to transition from renter to buyer, low interest rates are a plus.
If housing values increase too much, buying becomes more difficult. If you are renting a place where the rent has remained relatively stable with increasing housing values, you may be better off renting. This often has to do with whether you are renting from an individual investment property owner or a large real estate investment and management company. Some landlords appreciate great, long-standing residents and will work to keep rents lower.
One of the big barriers to home ownership is having a down payment. There are, however, programs for first-time buyers and non-traditional funding methods that can help you get into home ownership. You may pay a bit higher interest rate, but you may not need a large down payment.
Ability to Maintain Your Own Property
If you are purchasing a pre-owned home, you can count on a variety of fixers/improvements to be made. Do you have the skills or inclination to get them done? Some people are handy and some are not. Being handy is a big plus when considering buying your own home.
Keep in mind, home ownership comes with other expenses like property taxes, maintenance, HOA fees and home insurance. Accounting for all of these in your budget can help you make the best decision for you.
If you decide to buy, shop for the best mortgage rate and allow us to assist you in finding the best homeowners insurance policy at a price you can be comfortable with. Contact us to learn more.