Should I Rent or Should I Buy? Smart Property/ Rent Smart Can Guide You.

In today’s market there is a common question amongst someone looking for a new home, should I rent or should I buy?  There are many reasons why you should buy in today’s market and many reasons why you should not buy.  For starters, the current trend in home financing is simple… there not many programs available, tough lending guidelines, and a poor economy.  Add in the current job market and you will see that for many it may not be the best time to buy a new home.  On the other end of the spectrum there are builders, sellers, condo developments, etc., all with inventory which they find difficult to move… the home finance trend is affecting them as well.  So what does one do?  Lease! 

An individual looking to sell can lease his/ her property for a period of time until things turn around and they can sell.  Someone looking to move to a larger home or simply downsize can lease for a year or two until things change.  However what if a buyer can buy a new home, should they?  I would suggest not always.  There are times when it makes sense not to buy even if one can.  For example, let’s take a family who wants to move to a bigger, newer home.  They really can afford the mortgage, but should they really buy now?  Perhaps not.  You see, if a large down payment is not involved and the individual perhaps doesn’t have the savings, then it may make more sense to rent a newer home for a low monthly rent.  Compare the costs of a $600,000 home.  A home at this price would cost you a monthly payment of anywhere between $5000 and $6000 per month including your taxes and insurance.  Additionally, you must must aside 5-10% for the down payment.  Those high monthly payments could be hard on a family when you add all the other monthly expenses.  Now, you can rent this same house for half those monthly payments, not have to worry about taxes or home owners insurance and have money left over to save for your down payment when you do buy.  You can put your savings into an investment that is gaining interest for a year or more.  When it’s time to buy that new home, you can put down 10% to 20% or more and have lower monthly payments, less worries and more room in your pockets for life’s unexpected bumps in the road.

Now,  a situation in which you are putting down a large down payment would  be a good time to buy a house rather than rent… that is if you have a large sum of money to put down which will result in monthly payments that won’t “break the bank”.   Now, if you are looking for a smaller purchase then it’s a good time to move forward and purchase the new condo or home, if you can qualify for a loan.  With today’s low rates,  many incentives, low cost of real estate along with minimum down payment requirements it may make sense to go straight forward with the purchase.  

We are in a new age and keeping up with the housing market takes research.  Let us help you to make the right choice, the choice that makes sense for you and your long term goals.  Ask you Smart Property/Rent Smart Agent to guide you in making the correct decision.