Buying vs. Renting Your Next Home
Posted: June 17, 2015 by Jesse Olive
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Figuring out whether you should buy or rent your next home is a critical decision that should be carefully planned out before taking any action. And there are a number of important factors for you to consider that can impact your short- and long-term financial future as well. There are advantages to both buying and renting depending on your priorities, and Coldwell Banker Premier Realty is here to help you through the decision-making process so that you do what is best for you and your specific situation.
Here are three key considerations to think hard about before deciding to buy or rent…
2) Invest in the Future – As mentioned earlier, buying a home is an investment in your future and should be treated as such. Study the real-estate market in the area you are looking to move to and find out what property makes the most sense for you and your budget. Talk to neighbors to get their opinions and help weigh the pros and cons of potentially living there. Have your real estate agent look at different comps in the area to ensure you are making a good investment. If you are paying top dollar in your new neighborhood, there should be good reason(s) for that as well. Keep in mind, renting for the short term while you do your own research and figure everything out could be the best choice for the long term since you will not be tying yourself down with a mortgage right away. Make sure you are more than ready to handle the financial responsibilities of renting or buying in order to avoid hurting your credit down the road, incurring more debt than you can handle and taking too much money out of your savings. Also figure that you will need to keep a house for at least three years in a conservative market in order to break even and even longer to turn a profit.
3) Do the Math – This may seem obvious, but some prospective buyers simply do not realize all of the costs that go into purchasing a home. It is not as easy as only comparing the price of rent to a mortgage for a new home because there are other costs involved for the latter such as property taxes and insurance, HOA fees and maintenance, etc. Doing the math early on in this process to determine whether or not buying a home is more worthwhile than renting is the best and smartest decision you can make to give yourself perspective and piece of mind. You may even find that the tax benefits – including the opportunity to write off mortgage interest – can make buying a home cheaper than renting in certain cases. You can sometimes get the seller to contribute money towards closing costs too, so why not decide to pay your own mortgage for a home you will someday own rather than pay somebody else’s as a renter?
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