To Rent Or Buy
People often contemplate whether they should continue to rent or if it’s time to buy. This is a big decision so you must weigh the pros and cons that come along with each.
Renters experience advantages for a few reasons. Firstly there’s a list of costly items they don’t have to pay for including monthly mortgage payments, annual property taxes, special assessment fees, regular maintenance and upkeep along with unforeseen issues that arise with homeownership. Imagine your house or unit experiences flooding or there’s a pest infestation of some sort – all you have to do is make the call to your landlord and the problem will be taken care of swiftly and on the owner’s dime. You don’t have to make appointments, manage workers or spend money on the issue, it’s a part of your rental agreement and the lease verbiage should back you up.
As a renter you also don’t have to pay attention to local property regulations put in place or attend homeowner association meetings. You are simply renting out a space for a specified amount of time so there’s no need for you to get involved in the politics of the community. Although you get to avoid undertaking complications and bills that come along with homeownership there are also drawbacks to renting.
As a renter you can’t make any changes to the property without confirming with the owner and you don’t have a say in how the property is run. Your duties and responsibilities are limited and therefore your power is limited. Another big downside to renting and probably the largest one at that is you are paying a large chunk of cash monthly to live in a space, much like a mortgage, however you’re never going to see that money again, rather than a homeowner that would be investing in oneself.
If you can, you should make the move to buy. Investing in real estate is investing in yourself. All the money you put into the down payment, mortgage bills, maintenance and renovations will serve your financial progression. Over time property appreciates, especially in California. There will always be periodic dips in the market depending on the climate of the economy, but if you hang on to a property long term your equity will grow and you will see how far your money has taken you. Another notable advantage is the interest paid on a homeowner’s mortgage is tax deductible.
The largest aspect setting apart renters and homeowners is funds and readiness. As a homeowner you must be able to provide a decent down payment to get in the game and have a sizable reserve to cover you if something major happens. Whether you lose your job or need a new roof a monetary safety net is necessary to manage mortgage payments, annual costs and maintenance bills that occur. You also must be responsible enough to make payments on time, be committed to staying in the property or at least be accountable for finding reliable renters for your space if you decide to move or travel.
If you deem yourself ready to take on homeownership in terms of finances and commitment you should begin talking to your bank or loan officer along with a trusted agent.