There are many factors to consider when deciding whether to buy or rent. As a rule of thumb, buying is better than renting if you will be in the home more than six years. Here are some items to think about if you are considering a move…
- How long do you plan to stay in the home or apartment?
- How much is the monthly rent compared to a mortgage payment on the type of home you wish to purchase?
- What are the property taxes going to cost you?
- Are there any monthly condo or homeowner association fees you would be required to pay?
- When considering a rental, what utilities would you be required to pay, and what other things might the landlord hold you responsible for?
You also need to think about repairs and maintenance on the property, particularly if you are considering purchasing an older home. As a tenant, the cost of these repairs and maintenance items generally are the responsibility of the landlord and would therefore not be an expense to you while a tenant. You may, however, have restrictions on what you are allowed to do to the property such as paint colors and alterations to the design and layout, landscaping, etc.
Another consideration is how much money you currently have for an initial investment in the home you want to purchase. Can you put down 5%, 10%, 15%, 20% ? Depending on whether or not you put money into the home and therefore have equity in the property will determine whether or not you have to pay mortgage insurance premiums and how much these premiums will cost you. Perhaps waiting a few more years and saving up a larger down payment would lower your costs in the long run.
Here is a useful calculator in the New York Times article dated 4/21/10 that might help you decide which is best for you, renting or buying.
If you are in the market to buy or rent, I can help! Contact me at Janan@JananSellsRealEstate.com for further information.
