Should You Rent or Buy?
How many people actually like dealing with a landlord and paying for something that you aren’t ever going to own? Renting is ideal (and necessary) in some situations, but wouldn’t it be nice to actually be able to do what you want to the home you are throwing money into? There are many aspects that go into the process of buying a home but there's no need to be stressed. That's why we've broken down the factors that go into whether you should rent or buy your next home.
Pros of Renting:
Some people just aren’t ready to make the commitment to buying a home. The idea of knowing you’re responsible for your own house can be daunting. Life takes unexpected turns more often than many of us would like. Perhaps you aren’t ready to commit to your location or are unsure of where you want to create roots. Renting allows unsure people to move as many times as they would like until they are ready to settle down.
Lock and Leave
For example, the landlord often takes care of the landscape and whatever goes wrong with the house while you are there. It’s a “lock up and leave” lifestyle, which is ideal for many young professionals.
Cons of Renting:
There a quite a few reasons to avoid the rental process as long as possible.
Not Your Home, Just Your House
We can all agree there’s a huge difference between a house and a home. When renting a place to live, there is often a restriction on decorating and repairs. For example, whether or not you love the rooster wallpaper in your rental’s kitchen, it will likely be there long after you leave. Some landlords even have the restriction of putting nails in the wall, and not everything can be hung with command strips. Moral of the story is that eventually, you have to move out, so you can never really make it your home.
Location, Location, Price Tag
Homes in Phoenix, AZ have a wide range in price tags. Scottsdale has some of the highest demand for property in the entire city. As you can imagine, this inflates the price of homes for sale in Scottsdale and consequently, raises the rent cost as well. The cost of rent in Scottsdale Arizona can range from $1,400 to $6,300, and the lower end will just afford you a small apartment. There are cheaper rentals in the Phoenix area, but with those lower price tags comes a less desirable location and environment.
Either Buy or Burn You Money
This sounds a bit extreme, but it’s essentially what you’re doing when you pay rent. If you plan to live in Arizona for at least three years, you will like waste a minimum of $55,000 on rent. Renting is like throwing money towards something you will never own. In a way, you are burning your money because you aren’t building any equity in the home.
The Landlord Nightmare
Landlords and/or property managers are friendly, responsive people who prioritize your rental, right? In an ideal world, this would be the case. Unfortunately, there are many landlords who purchase property without any intention of actually managing it. An inexperienced landlord might underestimate the responsibility that goes along with having tenants. This means that if you’re unlucky it might take a long time to fix any issues with your rental. You might even end up paying for some repairs out of pocket for the house you don’t own.
Pros of Buying
Buying a home also comes with its advantages and disadvantages. Advantages include you have privacy, cost of living and pride in owning a home. When owning a home, there are also disadvantages. You have a long-term financial commitment, you’re responsible for whatever fails throughout the lifetime your home, and you are fully committed to a community.
Who doesn’t like having all the privacy in the world when they are trying to relax in their home. This is a big perk of purchasing your own home rather than renting. You are able to create your home in the way you feel most relaxed in your own backyard with minimal noise without consulting a landlord.
It’s an Investment
Buying a home is one of the biggest investments many people make in their lifetime. This allows for financial stability, knowing that the money you put in, you’ll get back one day. Not only does the value of your home grow over time, but so does your equity. Plus, the interest on a home loan acts as a great tax right off.
- Keeping up With the Joneses
While there is some societal pressure to purchase a home, this actually comes as an advantage in the long run. After the homebuying process is complete, there is a good amount of pride that goes along with owning a home. It is a lot of work to upkeep a home, to make it look the way you want it to look, but in the end, you put your time and money into something that turned out to be your dream home, and people take pride into doing that. You are able to show family, friends, and neighbors all the time and hard work you put into your dream home to make it homey and welcoming to all.
“Some people look for a beautiful place. Others make a place beautiful” – Hazrat Inayat Khan
Cons of Buying
While the market is hot for those looking to invest in real estate, we should also address the disadvantages that go into buying a home.
In for the Long Haul
When purchasing a home, you have to be aware that it is a long-term financial commitment, you have to be prepared to take that on. Home loans range from 15 to 30 years to pay off, but the plus side of this is that you are building equity and the price of your home will likely grow. It’s usually necessary to be in a home for at least a few years before seeing and return on investment. If that’s not what you have in mind, then maybe buying isn’t your best option.
It’s all yours
This is one of the biggest advantages to buying a home, but it’s important to address the downside of this fact as well. While the backyard, walls, rooms, and everything in between is all yours, so are the repairs and maintenance that goes along with them. You are responsible for everything that goes wrong within your home. This means, plumbing, electric, water leakage, etc. Some of these repairs can be on the inexpensive side, while some of them can cost you a pretty penny.
Stuck Like Glue
The popular Sugarland song is extremely relevant here. Once you purchase a home, you are likely stuck living in that community for a while. So, if you like to bounce around to different cities, if your work is unstable, or if your just overall unsure, we wouldn’t suggest purchasing a home quite yet. While it’s a great investment, it could be a disadvantage to the lifestyle you are living.
There are many considerations if you're trying to decide when you should buy a home. If you’re unsure which is right for you, contact our team of experts to see what your options are. That said, take the leap and evict your landlord sooner rather than later when the market is in your favor. There’s no disadvantage to setting up your future for success when it comes to a home investment.