Special offer

To Rent or To Buy? THAT is the Question!

Real Estate Agent with Dickens Mitchener

For the past several years, it was actually cheaper to rent a home than to buy home.  However, that's no longer the case.  Thanks to the median Charlotte home prices coming back down to more affordable levels and low interest rates, buying a Charlotte home has become a viable option for many Americans again.  To rent or to buy? THAT is the question.

Benefits of Renting
When you rent your home, your costs are set.
  Besides your living expenses (such as electricity, trash, water, phone, etc), your monthly payment is simply X amount of dollars.  Renters are not responsible for paying property taxes, HOA fees and homeowners insurance on their unit.  Most of the time, if something breaks in the house, you just have to call the landlord to get it taken care of instead of pocketing the expense.  Also, if you want to move, you don't have to worry about selling your Charlotte NC home before you can do that.

Things to Consider When Renting
You receive no tax benefits from living in your home.  You cannot build up equity in the property since you are not the owner.  You have no control over how much your rent will increase at the end of your rental agreement.  While you do have rights as a tenant, the landlord can evict you at any time.  You will need the owner's approval before making any physical or cosmetic changes to the property.

Benefits of Owning
While you are responsible for repairs on your own home, you also reap the tax credit benefits of homeownership.  You also have the freedom to paint, landscape, remodel, etc, when you own your own home.  In a rental unit, you are restricted to what the landlord will allow.  And, over time, owning a home can actually cost you less than renting one.

Things to Consider When Owning
As an owner, you are responsible for any repairs and maintenance costs as well as property taxes and insurance.  Also, if you are unable to pay your mortgage, you risk foreclosure, which is a huge hit to your credit.  Typically, when you own a Charlotte NC home and want to move, unless you have the money to support two mortgages, you will need to sell your home before you can buy a new one.  This means that you have less flexibity to move.

Renting vs Buying Comparison
Let's say that a renter signs a 1 year lease on their home for $800 a month and a homeowner pays $1000 per month for their mortgage.  At the end of the renter's lease, they will have to sign a new lease at a new rate that will run them an additional 5% (and that's a conservative estimate).  If you include the tax savings the homeowner gets every year from the interest paid tax credit, at the end of three years, the renter's payment will be higher than the homeowners.  And the savings continue on as long as the homeowner owns their home.

Buy vs Rent Comparison Chart - GinnieMae.gov
*Courtesy of www.GinnieMae.gov

So, if you find yourself asking the question "to rent or to buy", weigh the benefits and considerations of owning a home or renting one.  You will need to decide which is more beneficial to your lifestyle.  If you do consider owning a Charlotte home, don't hesitate to contact me.  I'm always happy to help!

Robin Husney, your Charlotte NC real estate specialist