Is It the Right Time to Buy Your Dream Home or Continue to Rent?
Growing up, we’ve been told that having a place to call your own is one of the greatest things to look forward to. We’re told that buying your own piece of America is the ultimate sign that you’ve made it. But, when is the right time to buy? Many renters often ask themselves this question and have a difficult time trying to decide the answer.
Perks of being a renter
If you’re having a hard time trying to decide if you should continue renting or buy a house, consider this: you are untethered to any one location. At the most, you are stuck living in your rental for one year. If you want to move to another rental, another city, or even another state, you can do so once your lease is up. As a homeowner, picking up and moving isn’t going to be that easy - at all.
Another benefit of being a renter is that you don’t have to worry about repairs and maintenance (other than yard work). If your hot water heater stops working, you don’t have to call the plumber and pay for it. You can call your landlord (or the property management company handling the rental property) and they’ll make the necessary calls and pay the invoice.
We can’t forget that renting may be the cheapest option for the time being. It’s far easier to come up with a security deposit, first and last month’s rent, and any application fees then it is to come up with a 20% down payment on a house!
Perks of being a homeowner
Although renting gives you the flexibility to move around and lower maintenance costs, there are really good reasons to consider buying a home. Forty-four percent of buyers who’ve contacted realtors in Raleigh, NC said they need more space - a realization they’ve made during the coronavirus pandemic. For example, some people need a larger outdoor space so they safely go outside and enjoy some fresh air, while others need a quiet space because they’re working from home on a permanent basis.
Another reason why homeownership is a good idea is that you can build equity. Unlike renting, you are building wealth. Home improvements such as kitchen remodels, painting, and gardening are great ways to increase the value of your home. Even simple things like installing new stainless steel appliances (which costs about $4,229 on average) and provides $5,982 in added value to your home. That’s a 141% return on investment!
On top of building wealth and having peace and quiet, homeownership means you have a fixed mortgage payment. Unlike renting, where your landlord can increase the rent when they want to, your mortgage stays the same - providing you have a fixed-rate loan. Also, the interest that you’re paying on your mortgage can be deducted from your federal income taxes.
Which is better? Renting or buying?
Everyone’s circumstances are going to be different, therefore we cannot tell you whether you should buy your dream home or if you should continue to rent. We will, however, suggest that you make a pros and cons list for each.
Ask yourself what it is that you like about renting and what would you miss if you bought a house. Ask yourself what it is about owning a home that appeals to you and whether or not you’re ready to take on all of the responsibilities that go along with homeownership; and, most importantly, can you even afford the costs associated with buying a home.
This exercise may seem insignificant, but once you visualize the benefits and drawbacks of each, making the decision may be easier than you thought.
For more on COVID-19 and real estate, check out HomeLight’s full report from their Q2 Top Agent Insights Survey.