As the spring real estate market of 2018 begins to spin into action, and a whole new set of home seekers contemplates entering, there is no single greater question asked than whether it's more cost effective to continue renting, or to buy, a home of their own.
When faced with the decision to rent or buy, many would-be-homeowners find that the answer will depend on three things: their market, where they choose to live, and whether they like to do home improvement and maintenance projects themselves.
Not all housing markets are the same.
How far the dollar goes in a market may make the decision for the buyer as to whether they buy. In a market where there are a lot of $100,000 homes for sale, there will be more qualified buyers, rather than in a market where the average price point is 10 times that amount.
If a buyer is choosing to live in an area where there isn't a great deal of rental inventory available, they may have no choice but to buy.
Sometimes it's tough to rent the house that you're looking for; there may not be the single-family 3-bedroom, 2-bathroom, 2-car garage available that they're hoping to rent, at least not for the long-term.
Deciding to buy, then, gives more of a selection of homes to choose from and makes it more likely they get what it is that they want, and need, in a home.
Many new homeowners underestimate the amount of home improvement and maintenance projects (and their associated costs) that are part of homeownership, especially if they've historically been renters. Gone are the days of calling the landlord when the water heater decides to leak, or the driveway needs to be repaved.
When it's their house, they're responsible for the repairs and upkeep. If they like to complete home improvement and maintenance projects, or if they've already decided that they'll be hiring someone to assist with those things, being comfortable with the responsibility (or not) will have would-be buyers leaning one way or another as it relates to renting or buying.
Finally, many home seekers will find that the actual costs of monthly rents and monthly mortgage payments for a single-family home are at an equilibrium in any given area. The challenge for them lies in not having the funds available for a decent down payment, or a low credit score, that hinders their ability to qualify for a mortgage that tips the scales in favor of renting over buying.
Rent or buy, knowing their market, the type of inventory available for rent or purchase in their area, and recognizing that homeownership will translate into home improvement and maintenance projects, should be part of the thought process when home seekers contemplate their next move.
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