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What to know before you rent
It may seem obvious that renting a house is distinct from owning one, but how exactly are they? Here’s some details to consider.
Maintenance Is Covered
One of the benefits of renting a home is that there are no maintenance costs or repair bills. This means that when you rent a property, your landlord assumes full responsibility for all maintenance, improvement, and repairs.
More or Less Temporary
Renters can live practically anywhere, while homeowners are restricted to areas where they can afford to buy. Living in an expensive city such as New York may be out of reach for most home buyers, but it is entirely possible for renters. Although rents can be high in areas where home values are also high, renters are more apt to find an affordable monthly payment than home buyers.
Down Payment & Others
When you own a home, there are so many costs involved in the mortgage process that will at first, make your head spin. It made mine. Altogether, these costs make up your closing costs, which are required at the final stage of the process to officially claim your home. Unfortunately, a lot of these costs are unavoidable. You should go over these costs with your mortgage lender to not only educate yourself on why they’re necessary but to also look for any unclear costs.
More Responsibility
The bright side of owning a home is obvious, you own the home! As you know, with every up, there’s a down. One of the downsides of homeownership is that all maintenance will need to be taken care of by the owner, you. When you rent, some landlords will provide extended assistance with maintenance as outlined in your lease agreement, but when you own a home, you are your landlord.
Better Financially Long Term
As you pay down your mortgage and reduce the amount you owe, without realizing it, you are saving as the value of your home is increasing—just as the value of your savings account increases with interest. You likely would get back every dollar you paid out and more when you sell, assuming you stay in your house long enough. Over time, the average 6% return (interest rate) on your savings should more than cover your outlay.
What is the 5 rule rent vs buy? Multiply the value of the home by 5%, then divide that number by 12 to get your breakeven point. If the monthly rent on a comparable home is below the breakeven point, it makes financial sense to rent. If the monthly rent is higher than the breakeven point, it makes financial sense to buy.
Until you're 100% sure you're ready to buy, it's wise to rent. If nothing else, renting can afford you the time to build your credit, gather some assets, and fine-tune your future goals. That way, even your monthly rental payments will be a stop-gap investment toward a much loftier one.
It typically takes anywhere from four weeks at the low end to six months (or more) to shop for and close on a house. But it can be quicker if you make a strong offer right away in a fast-moving market or slower if you have a hard time finding just the right place or keep getting outbid. When Do You Plan to Make a Move?
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Renters Reviews
Judy has expert knowledge of the Ferndale and surrounding MI areas. I trusted her advice on what to list my house for. She and her team helped me through every part of the process. She knows a lot of the details that can make a listing successful and is really sharing with those tips. Her team is very responsive to questions and were really great at reminding me when I needed to do certain things to ensure a successful sell of my house! She's knowledgeable trustworthy and a great negotiator!
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