So often I am asked by out of towners , “should i rent or buy when I relocate to Northeastern Ohio?”. My answer to that question is usually a quick conversation of how well they know the area and how long they intend to stay. If they are a first time homebuyer’s the conversation is also geared towards the advantages of both owning and renting and are they pre-approved. My buyers will always be well informed before we start any type of home search…having an excellent roadmap of what your monthly payments, downpayment and closing costs will be is key to having a healthy transaction.
I wanted to review with you the upsides of both renting and buying in todays market. Buying any home to build equity is in itself the main financial reasons prospective buyers jump into the market. On the other hand, not having to worry about incidental repairs or mowing the lawn can be a game changer as well. What should you do?
Reasons to Rent:
There is an upside to renting
Renting opens up the ability to research different neighborhoods. By renting you can test an area without committing to it.
Uncertainty in your career. If you think you might need to move in the near future, or are mulling job changes that span several areas of town or are located elsewhere in the country, you might want to rent, since buying ties you down a bit more.
Bad credit. If a recent bankruptcy has occurred, now is a good time to rent and save money….get back on track. Many lenders offer great assistance to meeting your goals and getting on point to buy a home.
No maintenance. When the pipe leaks under the sink, you call the landlord!
Incidental expenses. The landlord sometimes pays for a few utilities such as water, sewer, garbage, heat and you don’t have to worry about paying property taxes.
Reasons to Buy:
There are upsides to buying
When you rent, you don’t own anything. When you pay a mortgage, you increase your degree of ownership in your home with every payment. Also, you can borrow against your ownership (or equity) in the home to pay for major purchases, refinance your home a favorable rates, or, once you’ve paid he entire mortgage off, borrow to fund major purchases like a second home or your child’s education.
Tax deductions. You can deduct mortgage interest as well as your property taxes. Uncle Sam doesn’t give renters this bonus. Not only that, but if you meet certain requirements the IRS won’t apply a “capital gains” tax on your profits from the sale of your home. You can keep the first $250,000 in profit you make when selling the home if you’re single, or the first $500,000 if married. In addition, those who work from home may be eligible to take deductions for their home office and portions of utilities.
Creative control. So, you like dozens of pictures on the wall? Well, hammer away–they are your walls now. Go ahead and paint them mango! Wish you had another room? Go ahead and add one.
Maintenance choices. If you live in a house, you can decide how to approach maintenance, either doing it yourself or picking your own contractor. If you live in a condominium or homeowners’ association, you may pay a monthly fee to have maintenance work covered by the associations’ contractors.
I hope this helps you make a positive and successful decision. Please feel free to contact me for lender information to help you get started on pre-approvals or credit repair.