Posted On: July 20th, 2018 1:38PM
Real Estate Advice: Rent or Buy a Home?
Americans have always dreamt of owning a home of their own, believing that the investment offers them both security and financial growth. The recent turmoil within the property market has once again sparked the rent vs. buy debate.
As a REALTOR®, I continue to see the pros and cons of homeownership vs renting every day. Here’s some food for thought if you are grappling with this decision in your life.
The determination of which solution best suits your pocket will depend on several factors:
When should you opt to rent?
Bear in mind that you will have regular increases in rental over the years and that you will not be able to make any structural changes to the property. When you initially move in you will have to pay a large security deposit.
When should you opt to buy?
Home owners have watched the value of their homes increase steadily over the years in most areas of the US. The costs involved in purchasing your own home are approximately 1% of the purchase price and the cost of yearly maintenance is also estimated to be at 1% of the purchase price. When buying, you will have to make a down payment toward the mortgage which is usually between 5-20% and you will only be eligible to pay capital gains tax on its resale if you make a profit of $250 000 or more.
The decision to purchase or rent is entirely up to you and your needs. It’s a good idea to compare the figures on a price-to-rent ratio tool. Use this tool then give me a call to discuss your specific housing situation, https://www.realtor.com/mortgage/tools/rent-or-buy-calculator.