By Brenda Smith (BSmith Homes, Realtor) – This question should only be answered by you after considering your personal situation, to include knowing how long you plan to live in the home or area. If you can you see yourself in the home for at least 5-7 years or longer, then buying might be a good fit.
You have to also think about the job market, and schools, if you have children. If you are new to the area, it might be a good idea to rent for 6 months to a year to get a feel for the different communities. If you are ready to buy, and your personal financial situation allows you the ability to purchase, and you like the area, then the time may be just right for you to buy a home since you understand the responsibilities of home ownership.
If you do not want to deal with a landlord (the actual owner of the property) because landlords want their money upfront and this includes first and last month’s rent, security deposit, and possibly, a pet deposit, (costs that can sometimes add up to a down-payment on a home purchase), then buying may appeal to you. Also, you must remember that if you rent, you can’t do what you want to the property like painting, because you are not the owner.
In addition to knowing how long you will stay in the home, you should also review and crunch the numbers of buying vs. renting; and even those numbers will still differ for everyone’s unique situation. The below chart from the National Association of Realtors (NAR) shows a comparison of Buying vs. Renting which will allow you to make the personal decision for yourself, and if you have additional questions and are still unsure, maybe it’s time to speak with a Realtor to ask more questions.
The chart below shows a cost comparison for a renter and a homeowner over a 7-year period.
The renter starts out paying $800 per month with annual increases of 5%; the landlord increases the rent eachyear. The homeowner purchases a home for $110,000 and pays a monthly mortgage of $1,000.
After 6 years, the homeowner’s payment is lower than the renter’s monthly payment. With the tax savings of homeownership, the homeowner’s payment is less than the rental payment after 3 years.
Whether to rent or buy is a personal question that should only be answered by you and your family after considering what is best for your person situation.
Brenda Smith, Licensed Real Estate Broker
BSmith Homes, Realtor
PO Box 47831
Jacksonville, FL 32247