Decision Time - Buy Or Rent A House?
Because most homeowners invest a third of their income when buying a home, you may be fearful of spending so much money in a short period of time. For those who aren’t ready for homeownership, the alternative is to rent a home or apartment. But does this make financial sense or are you wasting money instead of investing in property that will appreciate over time?
Expenses Associated with Buying a Home
For the first-time home buyer, expenses such as a down payment, closing costs, and property taxes can be daunting to pay. In addition to paying for the home, there is homeowner’s insurance, utilities, maintenance costs, and the time spent taking care of the property. These costs can add up over time and if you don’t have an adequate amount in your savings account, you may be unable to care and maintain your home the way that you want.
But when you plan and save for a home, these costs will not seem as bad as your home appreciates in value. If you decide to move or relocate for your job, you can sell the home and hopefully make a profit.
For most people, buying a home is more than making an investment - it’s a place to call their own. Unfortunately, some people jump into the process without fully considering all the costs associated with homeownership. This is why many people have to foreclose or sell their homes before they’re ready to move.
Before you start house hunting, take a close look at your finances. Obtain a credit report, calculate the cost difference between renting and owning a home, and decide how much home you can afford. This will make the process and the reality of paying monthly housing expenses much easier to bear.
Renting Instead of Buying
Even though owning a home can be costly, the amount you pay in rent each month can also be costly. The main difference is that when you move, you will not profit from the move because you don’t have property to sell. But renting has many upsides as well.
Because you don’t own the property, you are not responsible for maintenance fees or repairs. These expenses are included in your rent. Instead of spending the weekend fixing the plumbing, all you have to do is call maintenance and they will send someone. Many apartment homes include utilities in the rent. All you will have to pay for is cable, internet, and phone expenses.
Another benefit to renting instead of owning is that you can move whenever you want because you don’t have any property to sell. For those who travel for work often or those who enjoy living in different places, renting is a better option.
While owning a home may make more financial sense in terms of investing your money in something that will give you a return, you need to consider your lifestyle and current financial situation. What is the point of investing in a home you can’t afford? Buy a home when you’re financially secure instead of buying a home when other people think you should.
Steve Ramirez is a Realtor® specializing in residential sales in Long Island, NY. Steve Ramirez strives to assist first time home buyers in achieving the American Dream by promoting homeownership, education, and importantly helping these first time homeowners keep their homes by being proactive and providing reliable information to the community. Steve can be reached by email SteveRamirez365@aol.com or by visiting his website http://www.lirealestateonline.com