Breaking Down The Fundamentals Of Renting vs. Buying
What To Account For:
According to the California Association of Realtors (CAR), California home prices in September 2015 were up 4.3% from September 2014. The number of existing single family homes sold in the state has also been on the rise within the last year. As a result of the strong gains in the real estate market, many have been asking themselves renting vs. buying, what the better option? Before buying a home, one needs to take into account all the factors that go into renting vs. buying. First and foremost is of course the monthly mortgage payment but then there is insurance, taxes, and repairs that also must be taken into account for. However, with all that come benefits like investment appreciation, mortgage interest and property tax deductions, stabilized payments, and a secure place to live. As renter on the other hand, you’re only monetary output includes the rent payment, renter’s insurance, and often a utilities payment. Home maintenance fees, taxes, etc. are all paid for by the landlord so renters have more money to freely invest what would have been their down payment into other options.
Making a decision that’s right for you:
As the real estate market continues to stabilize though, it can make more sense over the long term to buy now. Analysts report that over the next few years housing prices will continue to rise. Especially with the incoming influx of millennial buyers, who over the next few years or so, will begin maturing and setting down roots in large numbers. However, with that in mind, when comparing the renting vs. buying option, it really comes down to what’s right for the individual. On average rental costs have been on the rise, but for people with jobs that include the possibility of relocation it can make more sense to continue to rent now. Renting gives people the opportunity to be flexible with their lives so those facing a possible move within the next 3 to 5 years should consider strongly whether they want to invest in a home right now. However, for those individuals with a steady job and a career that doesn’t require the possibility of moving along with a healthy 20% down payment, many factors indicate that buying a home now makes for a strong investment.