Buying vs. Renting – Which is the Better Option for You? Part 1

Buying a home is a huge decision that affects you both financially and emotionally!

You can rent and increase your wealth, just as you can buy a home and increase your wealth, so long as you consider your overall spending and investment choices. Before making a decision as to which makes the most sense for you, we've compiled a 2 part blog series of questions with pros and cons to consider to help you decide which will best help you accomplish your goals.

Would it improve your life? 

People buy homes because they feel it will improve their life - offer them space, personalization options and aesthetics that a rental community may not. Rental Communities typically offer only 1-2 bedroom options, while homes can be much larger. When you buy a home, you will also have the flexibility to personalize or improve your home.

A home may come equipped with features such as a yard, sprinkler system and garage. On the other hand, rental communities may have great amenities, including pools, fitness centers, movie theaters, among others.

Consider neighborhood amenities and features and how they compare. If you own a home in a good neighborhood, you'll likely have the benefit of an HOA to help keep the community looking good and help uphold community standards so that your investment is protected and property values are maintained.

How long do you plan to live in the home? 

If you are planning to stay in the area for a while, purchasing a home may make the most sense for you! The money you spend towards your mortgage every month can help you build equity. Equity is the difference in what you owe on your property and what your property is worth. once you have equity in the home, you can sell or refinance and use that cash to improve your home or build wealth by paying off debt or inventing your money wisely. You can even consider payign extra towards your principal each month so that you can build equity faster!

For example, if you home's present appraised value is $250,000 and your outstanding mortgage balance is $100,000, you have $150,000 oh home equity. You may need to consider the cost to sell your home (commissions paid to a realtor that may represent you) but you'll still be left with considerable cash to re-invest.

It can take a few years before the average homeowner starts paying down on their principal and building equity, so if you anticipate that you'll need to relocate and sell in just a few years, renting may be a better option for you. This, of course, depends on market conditions. 

Are you comfortable with more responsibility?

One of the main rental benefits is having a landlord that can help answer questions, address concerns/complaints and most importantly, help you resolve any repairs to your rental unit at no additional cost to you. When purchasing a home, you should consider whether you are ready to tackle home projects and repairs as needed. 

Although you can expect to take on regular homeowner maintenance, one of the benefits of buying a new construction home is everything in the home is brand new! Because the appliances, flooring, HVAC units, etc. are all brand-new, it is unlikely that you'll need any major repairs completed for some time. with your new home purchase, you'll also receive a gaurantee, a warranty, that will assist you in resolving any warrantable issues you may have in your first year. 

We will continue this discussion in Part 2 of this blog series! If you have any questions in the meantime please use our Online Sales Counselor, Sandy Barsiq for help!