Whether you’re shopping to buy or rent a new home, there are steps you can take to ensure you’re home shopping the smart way. Learn about the monetary side of renting and buying a home, how to assess your living needs and creating a plan when it’s time to sell or move. Also, determine the scenarios where renting may be more beneficial than buying and vice versa.
Start by assessing how long you intend to live in the area, in the state or even in the home itself. If your job moves you around frequently or for some other reason your living situation only lands you in a location for a short period of time, then renting may be the way to go. Buying and selling a home is a huge financial responsibility. For short-timers, it can be much more convenient and cost effective to rent because the likelihood of you selling for a profit in a short time frame is low and the up-front costs of buying a home may not be recouped prior to selling if it.
Do the Math
When buying a home, there’s more to think about financially than just your monthly mortgage payment. You should also consider other costs of home ownership and whether you can afford these additional financial responsibilities:
- Property taxes
- Home owners insurance
- Home Maintenance
- Repair costs
Beyond monthly rent, none of these costs are required of a renter, so it can be less expensive and more convenient to rent versus buying. This is especially true if the cost of home ownership is going to overextend you financially.
Assess Your Needs
If you‘re planning to buy a home, don’t rush into it. Make a list of items that are important to you. The old real estate adage is that a home is all about the location, but in reality the features and characteristics of the home may overpower the location to fit your needs. For example, if the home is in an area prone to flooding and the home sits at the bottom of a hill, then you may have problems that you don’t even know about until you already own it. If you love to garden, then a home that has enough land to support your hobby is important, or if you cook, a home with a big kitchen is a must.
Create a Sell or Move Out Plan
Be a forward thinker if you’re buying a home. Avoid getting caught up in the excitement and think ahead to when it comes time to sell the home. Decide if you will list the home for sale or hold onto it as a rental property. Also, decide what to do in case your home value drops and you owe more on the mortgage than the home is worth. Think of some of the best and worst case scenarios and create some contingency plans for each, so you’ll be ready if and when the time comes.
For more tips about home buying and renting, visit theimk.com, where you’ll get a free home buying toolkit with everything you need to be a smart home buyer and home loan recommendations tailored to your unique goals.