Wednesday, August 7, 2013

Deciding to Buy or Rent?

If you're looking into whether to buy a home or rent a home, there's a lot to take into consideration and we at The First Time Home Buyer Guy, your source for Grand Junction Real Estate are here to help you with this very big decision.
When deciding whether to rent or buy, first ask yourself these questions:  How long do you plan on being in your house of choice? Would it be more affordable for you to rent or to own? At the end of the day, which would make you happier? Can you buy now and rent later or vice versa?
These are the most important questions that you'll need to ask yourself. An interesting fact to be aware of in making this decision is that according to the U.S. Census Bureau's 2012 report, the home ownership rate was at 65.4%, which is significantly lower from 2004 when it was at 69%.
Even though mortgage rates are at an all-time low and there are more homeowners statistically, the number is beginning to decline, because many people are choosing to rent for one reason or another vs. buying.

How long do you plan on being in your home?

If you're looking for a place to really settle down into, then you might prefer to buy a home. However, there are many people out there that choose to be long-term renters. Some people never buy a home, while others buy and then decide later that they want out of their mortgage.
Maybe they're having financial difficulties, maybe the house itself just needs a lot of work and they can no longer afford it, or maybe they decide to move out of state, so they decide to sell and then become renters. Many people also sell just because they simply retire or reach an age where they feel they just need something smaller and sadly have to sell.
Renting is also a great option for a first time home buyer, because you can rent while you save up to buy that dream house later. If you like to travel a lot and move from state-to-state or if you think that maybe one day you'd like to relocate, then maybe it's best to rent for now and buy later once you're settled somewhere that you plan on residing for a long time to come.

Would it be more affordable for you to rent or own?

This is an extremely important question that you'll want to ask yourself before jumping into any living arrangement. You want to know your finances inside and out. You want to know what you can and can't afford. The good thing about being a renter is that you don't have to worry about repairs if something needs to be fixed.
That's when you call the landlord and they take care of it for you, whereas if you're a homeowner, then that repair money will be coming out of your own pocket when your heating systems decides to kick the bucket or the roof needs to be replaced because it's suddenly leaking.
If you have an abundance of money coming in to afford repairs, then maybe that's not a worry for you, but if you survive paycheck-to-paycheck, then think long and hard about that one. If you happen to be handy, then you could always save on paying a repairman by doing a lot of your own repairs. That's something to take into consideration, as well.
Another fun fact is that as a renter, you don't have to pay all of the lovely property taxes, school taxes, homeowner's insurance, etc., but do those things make renting cheaper? Not always. Sometimes rent can be just as expensive as a mortgage and taxes. If you're considering becoming a first time home buyer, but are on the fence as to whether to buy a home or rent, then you'll want to take these next two steps.

  • You'll want to get a rough estimate of what your mortgage would be plus all of your taxes and insurance, then calculate the cost of all your utilities, while also setting money aside in the event of any needed future repairs.

  • Calculate the cost of rent plus utilities. Sometimes, the cost of utilities and rent are equal to the expenses of buying, minus repairs of cost. The cost of rent these days is pretty high.

  • Once you've done these two things, compare the two figures and then decide which option would be more affordable for you.

    What makes you happier?

    In the end, the decision to buy or rent also boils down to your own personal happiness. If it makes you happier to have a place to call your "own," then maybe becoming a homeowner is right for you. If it is your dream to buy a home, well then buy that home, but just make sure that you can afford it.
    If you feel like you can still find a place to call your "own" while renting and you're just more comfortable leaving future repairs to a landlord, then maybe being a renter is more for you.
    Here at The First Time Home Buyer Guy your source for Grand Junction Real Estate, we'd like to help you with this decision, so get in touch with us today and we'd be happy to answer any questions you may have or to set up a time to meet with you.