You may have been toying with the idea of buying but if you're really not ready, it's just not a smart move. I won't convince anyone that buying is a better option if it clearly isn't. I can't tell you how many military families got suckered into buying only to be tethered with a house for years that they now have to rent out because they couldn't sell in time after a deployment or reassignment.
Here are 5 Questions to ask yourself if you're on the fence between renting and buying.
#1. How long do I plan on being in the home?
Of course no one knows for sure as life always changes but if you plan on settling down and staying in one place for at least 5 years, buying may be a better option. You can gain some equity in that time and possibly sell later for a better price. If you stay longer than 5 years, you will gain even more equity. If you know you want to move in a couple years, renting is usually better. Perhaps you are retiring, changing jobs or you know that you will be moving to a new city within the next 3 to 5 years. This is where renting is a better option than buying as you won't be stuck with the home unless you plan on buying it for investment purposes and renting it out once you do move.
#2. Do I have liquid funds?
If your checkbook is running on empty at the end of every month or you simply don't have a savings account set up, you might not be prepared for homeownership. Things come along that will need to be taken care of and maintained in this costs money. Although you can buy a home with a zero down home loan or very little down payment, you may need other funds along the way such as and earnest money deposit and inspection costs. If you have anywhere from $2000-$10,000 in the bank, this is a better indication that buying might be a better option than renting. You certainly don't want to buy a home and then be strapped for cash even more than you are now.
#3. Am I ready to take on the responsibility of maintenance?
If you love the idea of calling up your landlord anytime something breaks and having them pay for it and fix it, homeownership may not be for you. Yes, it's always nice to have someone else take care of your property but if you're not ready to maintain the home yourself, homeownership may be a huge eye-opener. There's no one to call when the furnace breaks, and appliance goes out with a home needs a new roof. You are it! A lot of people love this responsibility as it gives them stability, pride of ownership and the sense that they are caring for their own little piece of land in this great big world. However, if you love the idea of letting someone else do all of that maintenance, renting might be a better option for you at this time.
#4. Are you fed up paying someone else's mortgage?
This is a great realization when a renter finally realizes that they've been paying for another person's mortgage rather than their own. You are literally helping someone else pay down the mortgage on a home that you are living in. That alone is enough to make someone want to start putting money away for themselves in their own home rather than to give it away.
#5. Do you love the area?
A lot of people rent in a particular neighborhood or area for several years before realizing that they love the location. Even if you plan on moving in the next 5 to 7 years but you know you love the location now, it might be a great option to buy. If the neighborhood is great, the school district is excellent and the neighborhood provides a lot of conveniences, all of these perks will be attractive to potential buyers in the future as well. This alone creates a good resale benefit for future buyers so buying now might be a great option.
If you're ready to get started buying please give me a call today. I'd love to help you find the right home for your needs or run over some numbers with you to find out if buying is the best option for now.