There are a lot of folks right now wondering if they should continue renting, sell their home and rent, or buy a home. It’s a very uncertain time but we want to make it as easy and as stress-free as possible. So, here are some things to consider if you are planning on renting your home, selling your home and renting, continue renting, or now is the perfect time to buy.
#1. Estimate the total costs.
Now is the time to go over all of the costs involved in all three scenarios. Should you stay where you are, sell your home and rent, or buy a home. There are costs involved to everything whether you’re paying for someone else’s mortgage or paying closing costs when buying or selling. Calculate and compare to see if the monthly cost as a homeowner is less than renting. Calculate if you can afford those monthly costs versus renting in your area including utilities. And consider if saving a 10% to 20% down payment is currently feasible for you. If owning a home makes more sense, those monthly costs will make more sense as well.
#2. What’s really important to you?
Think about your future and what owning a home is worth to you. Are you looking at building the future or do you prefer something that’s a little more temporary? If you’re planning on moving every couple of years, renting may be the best option. If you’d like to settle down for at least five years, buying will be the better option as you can build equity and when you do sell, have a bigger down payment on the next house or nice chunk of change at closing.
#3. Consider your lifestyle.
What about your job? Are there long-term goals for a career in a particular area? What about the family? Are schools important? Are you looking to live outside the metro area in a more rural or suburban setting? Talk through these issues and find out what you really want. If you buy a house and then sell in a few years because you really don’t like the area, the house, or the lifestyle it provides, you could be losing some serious money.
#4. Think about opportunity costs.
What is really the pros and cons of homeownership? Do you want a home that ties you down to a geographical location? Do you want to be able to pull up roots and leave at a moment’s notice? If the rent is equal to your monthly mortgage payments as a homeowner, then you have to consider opportunity costs. This is all the money tied up in the house. Can you make a higher percentage returns yearly with the money you would be using for a down payment versus investing in something else?
There are a lot of reasons to buy or to rent. Taking the time to go over these points and ask yourself the tough questions will make you better prepared as a homeowner or renter later on. Have questions about the Central Indiana real estate market? Give us a call at any time or begin your search below with our areas of specialty.