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The Choice Between Buying a Home and Renting

Written by Posted On Monday, 17 December 2018 00:48
The Choice Between Buying a Home and Renting

Everyone needs a place to live. Choosing what home to live in is one of the most important decisions a person will make. Unfortunately, this decision is not easy. The market for places to live is constantly fluctuating, and it can be a very technical process for the consumer. As such, many people can get confused when making this decision. One part of this decision that many may not be sure on is whether to rent living space or buy a house through the use of a mortgage.

 

What the Numbers Say

Twice as many people own their homes as opposed to rent them. Only 20 percent of the US population lives in apartments. Still, despite the numbers, some people may benefit from renting. With that in mind, below is an overview of the pros and cons of both paying a mortgage and renting.

 

Mortgages - Pros

Buying a house via a mortgage can be advantageous for many people. In fact, 84 percent of Americans believe buying a house is a good investment. Unlike renting, you are making payments to eventually own your own property. When you buy a home, the house is yours. You don’t have to concede to the demands of a landlord. You are the king of your castle.

 

Real estate is something that has real value attached to it. It can, for example, be given to your children. Real estate can also grow in value, and it tends to do in a steady manner. When renting, the only person who benefits from increases in real estate values is the property owner you are renting from. While renting can give you living space, it is not the same as owning something with inherent value. It’s not an investment like purchasing real estate is.

 

Mortgages – Cons

The biggest downside to buying a home through a mortgage is that it ties you down in one location for the indefinite future. If you are shopping for new homes in Sacramento, you better plan on living in Sacramento for the long term. Home ownership is not for people with questionable futures in regards to where they will live. If you believe you may be moving in the next five years for work, it may be easier to rent. Buying and selling a home takes a lot of effort. It’s not something you should do on a whim.

 

Renting – Pros

Despite the fact most people live in houses and prefer owning them, more people are renting than ever before. Millenials are especially bucking previous trends on real estate ownership. It’s a big movement in the market, and it is one that is growing.

 

The reason why millenials stick to renting is because it is more adapted to their lifestyle than owning real estate. Millennials tend to bounce from job to job. This lack of permanent job security makes buying real estate seem like a risky investment. In that regard, they are probably right. If you don’t have strong job security and may move in the future, renting is simply more advantageous.

 

Renting – Cons

Renting is paying a constant fee without the promise of permanent ownership of that property in the future. There are also other big downsides to renting. Most people can only afford to rent rather small apartments in most locations. That lack of space is not adequate for everyone. This is especially the case for growing families. If you want to raise a family with multiple children, buying a home through a mortgage is clearly a superior choice. An apartment may simply be too cramped.

 

Mortgages and renting both have their own benefits and drawbacks. Consider them all when making your decision. Also consider your future and the kind of life you want to lead. Renting and home ownership are the right choices for different people. Others in different situations may not receive the same benefits as you would in regards to renting or owning real estate.

 

The Do's and Don'ts of Selling a Home

When you decide to sell your home, the process can be stressful, difficult, and traumatic (if done wrong). Whether you not you want to sell that house, if you are moving, selling is the smartest option. If you’re desperate to avoid selling, you could start by renting out the home and wait until you more desperately need it sold. It’s normal to feel apprehensive about going through the process of selling so make sure that you have a great real estate agent to back you up and make sure that you’re doing all that you can to make the process go smoothly. To help you on this journey, here are the do’s and the don’ts of selling your home.

DO: Look at It with the Right Attitude

A problem that starts with the original homeowner is that they’re not quite ready to let go of the home. You may have lived there for decades--maybe even raised your children in that house. The last thing that you really want to do is leave all those memories behind in the house. However, if you go into the process feeling reluctant about selling the house, people you meet with will feel that energy from you. Your real-estate agent will be unsure about how to approach the process, and many people that you meet will feel your anxiety. It’s about to feel sentimental, but you need to be ready to move on before you put the house up for sale. It might help if you try to think of the future ahead rather than dwelling on the past.

DON’T: Be Passive About the Projects

One of the complaints that real-estate agents give about people selling their homes is when the person selling is overly passive about the project. A lot of the time, to make your home sell better in a competitive market, you will need to update parts of the home. You might have to redo the deck in the back or give the walls of a room a fresh coat of paint. People who are passive to the point of laziness resist these small projects, and the house becomes harder and harder to sell. Listen to what your agent has to offer you and take their advice.

DO: Research the Market

Your agent will give you an amount that they feel would be best for you to list your home as. But you shouldn’t go into the process blind. Do some research on your own and get a feeling of what you’re competing against. You should know the difference between the price of new homes in Sacramento and the price of an older home. You need to keep in mind that some homes will have nicer appliances that could drive up the price of the home. You don’t want to resist the market and set your home at a higher price than the ones around you. Yet you also don’t want to be dirt cheap or else people might get nervous about the house. Place your price in the competitive range and keep an eye on the housing market to see if it fluctuates or changes over the period of time that your home is up for sale. You want to be able to adjust and react to any of those changes.

DON’T: Panic if Your House Isn’t Selling

A lot of homeowners start to get nervous after the first couple months of the house being up for sale. As the months drag on, that panic turns into hysteria. You need to do your best to avoid feeling this way. The house will sell--even if it takes a while. Your real estate agent will have dealt with situations like this before and will know exactly what measures need to be taken. Listen to the agent and follow the steps that he or she lays out for you. But, don’t panic. It will all be taken care of.

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Carol Evenson

Carol is a home renovation specialist with a background in organization and sales. She assists realtors with business management and growth.

https://twitter.com/cmill_com

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