Everyday coutnless number of people are looking for rentals without any information as to what the benefits of renting a home are or aren’t . According to the National Associated of Realtors, the share of first time home buyers in the market has been steadily inscreasing over the years. We first saw a recovery after the crash in 2013 at 29% of the market to 2017 first time home buyers were 43% of the market. This is known to be directly related to the fact that for the first time after the resession, mortgage rates are low, homeowners are trying to upsize so they are actually selling for a reasonable price, and there is an insane amount of programs to help first time buyers with down payment and closing costs! Yet, buying still isn’t for everyone. This article will help you go over the pros and cons of getting into home ownership!
Rental Home Owner
Lets start off with the basic meaning of what a rental truly is. When you agree to rent a home you are agreeing to make a payment for the temporary use of a property owned by another. In addition to the rent and council tax when you are in a rental agreement, you typically are responsible for paying the utilities and any other bills you acrue to live. You can expect to for gas, electric, city water/ well use, cable, internet and phone. There is many different ways your rent payment can be set up depending on the landlord such as bi- weekly, monthly, quarterly or even yearly.
Another cost involved with renting is getting a security deposit. A security deposit is a one time fee paid when you rent a home or apartment. This fee is typically due at time of reserving the home and is usually equal to one months rent. The security depoist can be refundable or non refundable, depending on the landlord. The landlord the owner of the home or a property managment company hired to run it on behalf of the owner.
What is Buying?
To buy a home means simply to obtain property for a price. In a very quick conversation with a loan officer, they will be able to go over your income, assets, and down payment which will all lead to them giving your agent a pre-qualification. This is the first step in the loan process and actually kicks off your home search!
Just as renting, you do still have costs you are responsible for. Instead of paying the owners mortgage loan, you would now be paying your own. Most lenders/ loans require the taxes already be looped into the loan already to minimize the chance of an owner forgetting to pay taxes so that is not as near of a problem anymore. You are also still responsible for the utilitys as well as things like tv and internet BUT alot of companys actually give great discounts to homeowners! Also unlike renting, you don’t have a security deposit.
In a quick conversation with you about your income, assets and down payment, a lender can prequalify you to buy a house
Renting Vs Buying
Pros To Renting
- You have a garanteed payment/ home every month for that determined contract length
Cons To Renting
- You can’t break your lease without penalty
- You are restricted on what you can do in the home
- Typically you can’t paint or change the home at all
- You are paying more than the owner is paying to buy the home
Check out this great little buy vs rent calculator
Pros To Buying
- You can control when you sell
- You can paint the walls as much as you want
- You can even knock out a wall
- Your monthly payment is an investment in your future
- Great deductions on things such as taxes
Cons To Buying
- You have to move in?
So What Are You Waiting For?
With all of this information, it is amazing that people are still getting rich off renting houses out! Even more amazing that people are renting and helping their landlords get rich! But everyone does have their own reasons. So I am curious, whats yours?
Go ahead and let us know below whats keep you from home ownership!
Your Real Home Needs Staff