Trying to decide whether to rent or buy? Friends and relatives telling you it is better to buy? Don’t believe them without investigating the details. Consider the following reasons why it is better to rent with Wood Partners than buy and decide for yourself.
The cost of owning a home is more than just the amount of the monthly mortgage payments. Keep in mind you will have to pay for any maintenance or renovation needed. Furnace needs repair? Roof has a leak? Bathroom needs updating? These will all be your financial responsibility and often do not add anything to the value of your home. In addition you will owe property taxes and homeowners insurance.
When you rent you will pay a one-time security deposit, monthly rent and renter’s insurance. Any maintenance will not be your responsibility.
Consider Your Financial Position
To buy a house you will need to make a downpayment. A twenty percent downpayment is typical. If you can’t afford the downpayment or have other debts you may not be in the best financial position to buy a house. Renting is a better choice.
How Handy are You?
In addition to the financial responsibility for maintenance you need to consider if you are up for the task. At 2am when the furnace fails or a water pipe breaks will you know what to do? Will you have done the preventative maintenance necessary to prevent these middle of the night issues from happening in the first place? A rental property will have a maintenance schedule to ensure failures don’t occur. In the rare situation that something does break you will have a phone number to call and someone will come fix it for you.
How Many Years Will You Stay?
Are you planning on staying in the same location for 20 years or are you more likely to move in 5-7 years or less? If you do not plan on staying for many years it may be better financially for you to rent instead of buy. When you sell you will be responsible for paying closing costs and a 6% realtor fee. Also consider the stability of housing prices. If your house loses value, you will lose money.
Community and Amenities
If you are looking to become part of a community an apartment may be a better match for you than a house. Often apartments can also provide extras and services that you would not have in a single-family home.