Weighing Your Options

Should you continue renting or buy a home to live in? It's is one of the first questions you'll ask yourself before getting into the real estate market. In our opinion, the long-term answer is always yes. That being said, it's an answer that must be dissected since it will vary depending on each individual. 

Let's go over the pros and cons of owning and you can apply it to your specific lifestyle. 

PROS of Owning

Value

Let's start off by listing the biggest selling point of all, appreciation. When you own your home you are living in an asset that is appreciating in value. Unlike a car, a home get's more expensive as the year's pass. This is why your long-term goal should always be owning a home. You cannot lose if you own your home for 15 or more years, with 30 being the ultimate goal as many home loans are paid off by this time.

Fixed Costs

Assuming you are taking a fixed interest rate loan (highly recommended), your mortgage payments will never go up for the life of the loan. Compare that to roughly a 5% annual rent increase. At some point in your life, your rent will become more expensive than your house payment.

Pay Your Own Mortgage

If you rent, you don't have a mortgage payment....not true. It's just not yours. Your rent payment is likely covering at least some or ALL of someone else's mortgage. Sounds frustrating right? You're hard earned money is helping someone else retire.

Piggy Bank

Owning a home is essentially a back-end piggy bank. Sure, you're paying interest on a sizable loan, however, you're also paying your back into the value of the property when you purchased it. If you live in the home for long enough, you'll own nothing and have a much higher net worth.

CONS of Owning

Expense

It's often more expensive, at first, to buy a home than to rent. The best loans are typically with a 20% down payment. This can take a long time to build up, and then once your purchase is made, it is locked up in an illiquid asset. Your mortgage payments are likely higher than your current rent as well, especially when including taxes and insurance. Most people buy up when purchasing a home too. Meaning, if you rent a 2 bedroom apartment, you'll usually look for a 3 bedroom house. 

Flexibility

Selling and/or renting your property can be a process. If you're needing to travel to another state for a job change or family plans, you'll need to figure out if you want to hold on to the property or not. With renting, a simple 30 days notice will suffice.

Repairs

Maintenence can be a pain. Electrical, plumbing issues, roof leaks...these are all big-ticket items that homeowners have to be ready to take on should problems arise. It's not fun. As a renter, you can easily email the landlord to have it fixed and not stress about if you have enough money in your savings account to fix your water heater when it bursts.

For a rent vs buy chart that shows when it becomes less expensive to own a home, feel free to reach out HERE. We are here first and foremost as a real estate resource for you, your friends, and your family!