One of the biggest decisions you’ll make in your life is to purchase a home. New? Old? Remodeled? Rent? There are so many questions to consider. If you’re a renter now, why should you buy a house? Perhaps you’re looking to invest into a bargain housing market still recovering from 2008 or maybe you see the value in equity of owning versus renting. Whatever the case, here are some answers to some of the burning questions you may have about the rent vs. buy dilemma.
Majority Rules
If you’re one of the 43+ million renters in the United States, you may be surprised to find out that you’re actually in the minority. According to the National Multifamily Housing Council (NMHC), 63% of the country’s 117 million people live in owner-occupied dwellings. While the numbers may be tough to understand, the important thing to see is that 3/5 of the nation owns the homes they live in. At the same time, however, those homeowners are stuck footing the bill for repairs, home maintenance, and many other things renters don’t have to be concerned with.
Home Upkeep and Maintenance
Yes, homeowners foot the entire bill for any home repairs and mechanical problems (one of the major benefits of renting), and purchasing a home can leave you a little vulnerable. All of the things you’ve taken for granted that your landlord did on your behalf all of a sudden can become your worst enemy. If your A/C goes out, hot water heater quits, or stove decides it’s heated its last, it’s on your head to fix it or get it fixed by a professional. That can get expensive! But not so fast. Far too often, landlords collect a considerable upcharge from the actual mortgage they pay on their property. In the end it’s you, the renter, who is paying for those same costly repairs on your landlord’s behalf.
The “M” Word Mortgage.
While it does in fact share many of the same letters as “morgue”, it isn’t necessarily the death sentence you may think it is. Renters have it easy: they don’t owe anyone for the house they live in (aside from the rent due, of course). But at the same time, as a renter, you don’t have anything to show for all of those payments you’ve been making. Many renters gawk at the $100,000 or $200,000 bank note they would potentially take on as a homeowner, but the reality is that not all of that money is due up front. With each mortgage payment you make monthly, you actually own more and more of the home you live in instead of owning nothing in return for your hard-earned rent payments. In the end, home ownership is an investment, and property is a valuable asset.
The Landlord’s Dilemma
If you’re a good renter: well-behaved, timely in payment, and well-groomed (well, most of the time anyway), then you don’t have to worry much about your landlord giving you the boot and forcing you to find a place to live. Landlords can be a fickle mistress, though. Mortgage rates are low, and property is a valuable investment to make in today’s economy. One of the few things that holds value are homes and property. This is great if you’re looking at buying a home, but it can put your landlord in a tight spot. There’s no telling when the right investor may come along, buy the property at a great price from your landlord, and move swiftly along to flip the house or rent it for far more than you’re paying. Unfortunately, as a renter, there’s nothing you can do about it. In the blink of an eye, you’re without a place to live and may be looking for another rental.
Home Improvement on Your Terms
As a renter, did you ever feel like you had to nag your landlord to patch the hole in the floor, replace the carpet, or repaint your bedroom? Sometimes landlords are Johnny On The Spot with small requests from renters, but more often than not a patchwork job will usually suffice.
Buying a home gives you much more flexibility to do the repairs and improvements on your home when you need them and on your budget. Got that big $2,000 bonus at work? How about doing that landscaping project you’ve been saving for? On the flip side, say you didn’t get salesman of the year. “Well, I guess we can wait on replacing that carpet.”
The thing to keep in mind about home ownership is that there will always be a project to take care of, but by owning your own home you can do these things incrementally, on your time, and on a budget that works for you.
Get Help Making the Right Choice
If you’re seriously considering purchasing a home, the best thing you can do is talk to a professional about getting a mortgage. Interest rates are hovering at some of their lowest in years, and now is an excellent time to consider purchasing a home and making the initial investment. Talking to a loan officer here at Tidewater Mortgage Services is a great place to start the discussion about financing your first home and ditching the dreaded landlord! Get in touch today to speak about the best options for you to finance your new home.
