Do you need a real estate agent to help you buy or rent a new home? You're not sure whether to invest in a prime piece of property or continue on as a renter. Take a look at what you need to know about homes for sale, homes for rent, and how to choose between the two options.
Which Option Is Cheaper?
Can you afford a monthly mortgage? Even though it might seem like this payment would easily outweigh rent, a mortgage might save you money. According to the U.S. National Credit Union Administration, in as little as three years, a homeowner's annual mortgage could cost less than a year's worth of rental payments.
How can a mortgage cost less than the price of a rental? There are a few ways homeowners save money with a mortgage. A lower-priced home will have a less expensive mortgage than a high-priced rental. Beyond the cost of the specific property you choose, the overall home prices in your local real estate market may favor a buyer versus a renter. This means the average purchase price works out to less than the average cost of a rental.
Along with the property price and market value, tax incentives and rental inflation can make it better to buy. Homeowners can deduct mortgage interest payments (up to a limit), reducing the overall costs they pay annually.
Do You Want a Forever Home?
Even though finances play a primary role in this decision, cost isn't the only factor in the buy versus rent debate. Are you tired of the annual apartment hunt and move routine? If you're ready to put down roots and settle into a forever home, it's time to buy. After you close on a new home, you won't need to pack, fill out change of address forms, stop and start utilities, or learn the ins and outs of a new neighborhood every 12 months.
Are You Ready to Invest in the Local Market?
You're pretty sure you want a forever home, but there's still a chance you could outgrow your first purchase, need to relocate for a job, or just decide to move to another neighborhood, city, or state someday. Does this mean you aren't ready to buy? While you might want to hold off and rent for another year, you could also consider the investment opportunities home-buying offers. If you decide to move in a year, five years, or any other time, you can hold on to your home as an investment rental property.