2/05/2013

Buying or Renting--What's Best for You?

What should buyers be considering BEFORE they buy?  Looking on the internet gets people into the initial stage of exposure, before they even call a REALTOR.   Most people think the property viewing stage is fun, both on the internet and in person, and it should be enjoyable.  But what about the advance homework?  Internet photos and marketing can get you hooked, but it can also be a nervous, even fearful time, coming to the decision to submit an offer when you're new to the process. Even if you're a repeat buyer, buyer's remorse or indecision will have far less impact if you think over some things in advance, and consider now what your fears may be (it's not unusual to have a few).

Sticker Shock:  Renting might be cheaper than owning -- do you have a mortgage pre-approval with estimated costs before you go out and look?

Home Maintenance: Are you prepared to spend time on painting, fixing leaks (or hiring someone), mowing a lawn, saving up for a new roof? Do you know how much it will cost to heat that pool every month--or just keep it clean? And then there's annual insurance premiums.  Just some of the things to think about.

Have you checked out all utility bill costs for a house vs. your one-bedroom apartment? It would be a smart thing to do now. 

Do you like the idea of being able to move on quickly?  With renting, you have the freedom to move on quickly. You can't always do that when you own a home.  And, you can't be foreclosed on (but your landlord can).

If the responsibility of a property is not for you, you might be happier renting.

But, homeownership includes many advantages, including the following:
  • a hedge against inflation.
  • sales proceeds which allow towards the purchase of a new property
  • the potential of renting out to others (income)
  • capital gains exclusions when you sell (depending on your status)
  • tax deductions you wouldn't otherwise receive
  • building home equity and wealth
  • a stable base for you and your family -- homeownership differs from rental in this
  • having a mortgage can improve your credit score
  • ability to borrow against your home
Are there disadvantages? Yes, depending on how you view them:
  • Long term commitment
  • Taxes and insurance generally increase over time
  • You may have HOA dues that increase over time
  • Total housing payment may be more expensive (but don't foget you have deductions)
  • A home can be foreclosed on.
In all, there are many reasons to buy or not buy -- I have a list of 56 of them--  and right now one of them is the low, low interest rates which make your monthly payment so much more affordable.   Would you like a more complete rent vs. buy comparison?  I can help with that (there are many online calculators, but they may not be complete.)  Contact me with your questions, I'm available online or by phone!
Contact someone who's experienced (18 years) and has been in the same place for even longer!
Julia Huntsman.REALTOR®, CDPE, e-PRO®, SFR, Broker

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