Buying a home is one of the greatest decisions one can make. Many buyers find it challenging since it changes many aspects of their lives. On average, people can change their minds about such decisions every 5 – 7 years. Thus, making the right choice comes as the best way to avoid suffering from buyer’s remorse.
Most buyers still worry if buying a home is the right option even after considering all the information. Purchasing a home has many advantages for some. Yet, for others, the disadvantages far outweigh the advantages. Renting can be a better choice for such individuals. The best way to know if you should rent or buy a home is to look at your situation. Such a measure will allow you to make the right decision.
Here are a few things to consider that will help you settle on the right choice.
Advantages of Renting
Renting is an ideal option for those in need of less responsibility and more flexibility. It doesn’t put a strain on your savings or introduce changes to your current lifestyle. It’s also a good option especially if you travel a lot and have to find a new place to live when you move.
Renting also allows you to find a home in expensive markets without having to save for years. You are not as tied to rental property as you would be to a long-term property. This means you also bare fewer maintenance and insurance costs. Renters insurance costs less than homeowners insurance which is a testament to this fact.
Property taxes in some states are higher than 2 percent. For instance, in New Jersey, a $250,000 home is subject to a 2.38% tax rate. This means you’d be liable to make annual tax payments of $5,950. The good news is that many states don’t have such punitive tax regimes. But the more your home costs the higher your property tax rate. As a home renter, you don’t have such worries.
Things to Know Before Renting a Home
Finding a rental property that’s the right size for your family is one of the most important aspects. Most renters want homes with proximity to things like schools, public transport, and stores as well as other amenities and infrastructure.
Here are a few things to go over with a potential landlord before signing that lease agreement.
Your credit history
Your credit history can present a problem when you try to rent a home. Most agencies recommend submitting a credit report letter together with your rental application. If your credit report doesn’t reflect issues like late payments, debts, bankruptcies and other financial issues, you’re good to go!
Rental costs and due dates
Before signing any lease agreements, determine if the monthly cost is within budget. Make Inquiries about the cost of the security deposit (if there is one). Discuss acceptable payment methods for the monthly rent and the deadlines for making such payments.
Pest control, plumbing, and broken appliances often cause a lot of undue stress to renters. Consult your potential landlord on the maintenance services he/she will provide. Also, establish how long it would take them to handle such maintenance requests
Electric, gas and water bills are utility costs you have to take into account when renting a home. Determine if you will pay separate utility bills if they are part of your rent or the landlord will pay a part of it.
Availability of parking space
Inquire if you will need to pay for a parking permit or if it’s part of your monthly rent. It’s also important to establish if the parking is close to your rental home and if your guests also have to pay.
The property owner’s pet policy
Some rental properties have policies that prohibit pets or limit the number you can keep. If you have a pet or plan to keep one, discuss this with your potential landlord.
Advantages of Buying
Buying a home is cheaper than renting when you look at the long-term costs. Sure, you have to pay a lot upfront and there’s a closing cost. But, after that, the monthly payment plans are actually lower than rental costs. Mortgage rates are currently at their lowest. This makes the cost of buying a home less than renting in 58 percent of the US property market.
Accounting costs and property taxes are tax-deductible. Meaning interest paid on mortgages attracts the largest tax-deduction. Such an exemption allows you to keep more of your hard-earned money. With homeownership, you have the freedom to renovate your home. Your privacy is also more enhanced when compared to a rental home.
A home is also an asset that increases your financial stability. It will appreciate and your kids can have something to look forward to inheriting. The best thing about buying a home is, it’s yours. You aren’t kicked out when you fail to pay the rent or when the landlord opts out of your current lease agreement.
Things to Consider When Buying a Home
Buying a home is one of the most significant financial decisions you will make in life. When you opt to buy a house, you should consider how it would change your financial situation as well as present and future lifestyle.
Here are a few factors to consider before making that purchase.
A great location ensures your home remains a viable asset no matter the state of the real estate market. You can always fix-up an ugly home but there’s little you can do for a torn down neighborhood. Finding a home near your work, social amenities and schools will spare you from some transportation costs.
Buying a home is a serious financial commitment. There are huge upfront costs and subsequent monthly payments. So ensure that you are able to meet such obligations before committing to such a purchase.
Access to basic infrastructures like roadways, cell towers, street lighting, and adequate drainage is vital. Before buying a home, please consider its accessibility to such infrastructure.
Size of the house
Remember that this will be your house, so it has to fit all your stuff and accommodate all your family. Ensure it has an appropriate number of bathrooms and bedrooms. The kitchen layout is also another important consideration. If you have a pet, you should go for a home that sits on a lot that can accommodate your furry pal’s need for outdoor activity.
The cost of repairs and renovations can hike up the closing cost. As such, conducting a home inspection is vital. Most real estate agents are cunning and will stage a home and make it look flawless. Check for any renovations and repairs before signing that dotted line.
Should I Buy Or Rent?
Even after considering all the above factors, most people still wonder if it makes more sense to buy a home or rent. One way of eliminating such doubts is consulting a rent vs. buy calculator. Such a tool will show you the total cost over time. It also calculates the value you will receive if you sell your home in the future.
In the end, buying or renting is a subjective choice. Making this choice entails understanding your financial situation and lifestyle. The property market is also a determinant factor. It makes more sense to buy or rent in certain states and neighborhoods. Thus, before you commit to either choice take some time to shop around. Do proper consultations and inspections to avoid any future disappointments.
At ProspectNow, our core commitment is ensuring that our clients get amazing homes at the right cost. Are you still wondering whether to buy or rent a home? Contact us today to get a deal that’ll fit your finances and needs.