Have you ever heard someone say, “If you’re renting, you’re throwing money away?” Well, I hear it every day in the real estate industry! I agree it may seem that way, but at the end of the day, it comes down to the circumstances an individual is currently in. While renting means that you do not have equity in the home you are living in, it does have its benefits. When you rent a home you don’t have to worry about paying taxes, insurance, association fees, mortgage payments, repairs/maintenance, etc. In other words, you do not have to stay committed to that property for the ‘long term’. You have more freedom and mobility – you got a job offer in another city? Great! You can pack up and leave in no time. Most people are also able to save more money when renting; which in the long run, will help you buy the home that you’ve always wanted.
However, when the time comes and you’re ready to make the big move to buy, you should consider the following important factors:
- Financial Position
- Where are you in your life, financially? Do you have high credit card debt, student loans, or a car loan on top of that? How is your credit score looking? The decision to buy should always be made carefully. Always remember that mortgage payment may slow you down on all of your other financial goals – like paying off your credit card debt, or your student loans. Analyze your financial position to see what makes the most sense for you at this point in your life. Don’t make any irrational decisions – when the time is right, you will feel confident to move forward with purchasing a home.
- Job security is one of the most important things to consider when thinking of buying. Why? Because if you don’t have a job, who will pay the mortgage? If you see yourself growing professionally and having a stable job for years to come, setting all other things aside, you should proceed to purchase a home.
- Purchasing a property should be a long-term investment – unless you are an investor flipping properties. If you are planning to live in the area for several years, then buying may be more cost-effective. However, not always. You should run through your numbers and see how many years you would have to live in the property in order to break even with the initial costs of buying.
Buying property has great advantages, especially long-term. I’ve heard many stories of people who retire millionaires thanks to the significant increase in their property value. It didn’t happen overnight, but if you are cautious and buy smart, then you too can build up a lot of equity and make money when you go to sell.
Comment with any questions you have. And thanks for reading!
Until next time.
Your Real Estate Expert,
Andrea Vengoechea, Real Estate Advisor
Thinking about buying/selling/renting? Call us today -- 305-970-2884