Not sure if you should buy or rent?
There are several ways to come up with an answer to this question. You have to start by asking yourself a few very important questions.
Will you be financing the home?
Of course your financial situation may dictate which options are available to you so it's important to talk with a great loan officer to get pre-approved. Sometimes this process identifies problems with you credit that you had no idea existed, like a past medical bill or overdue parking tickets. It's best to get an good understanding of your credit situation before starting the home buying process. You certainly don't want to go out and look at homes that you can't afford to buy.
Are you a First Time Home Buyer?
If you are a First Time Home Buyer, you may not be aware of the many benefits of owning a home. I have spelled them out for you in a blog titled, Should You Buy A Home? These benefits may or may not outweigh the benefits of renting in your situation, but it's good to know what they are so you can make an educated decision.
How long will you live in your next home?
This is an important factor to consider. Zillow recently did an analysis they call a breakeven horizon which looks at the time you must stay in a home before the cost of renting exceeds the costs of buying. Take a look at some of the maps I've pulled from their research site.
In this national map, you can get a quick glimpse at the areas that are orange and dark blue that are on the low and high ends of the breakeven range. Let's take a look at the Breakeven Horizons for some Washington DC Metropolitan Area Counties. I've added several of the county maps below.
Washington DC has some distinct areas that cover many adjacent neighborhoods and zip codes. It looks like it is color blocked in 4-5 distinct regions.
Montgomery County in Maryland appears to have two small areas that stand out from the others in the county.
In Virginia, I've listed three counties for you to view. Arlington County in Virginia is almost entirely one date range.
Fairfax County in Virginia is spread over only three breakeven periods, but is mostly within two breakeven ranges with a few small areas in the 10-20 year range.
And Loudoun County in Virginia appears to range from a 3-10 year breakeven horizon.
If you aren't sure how long you might be living in the home, it might be good to talk with an experienced exclusive buyers agent to see what the inventory and turnover rates are in particular neighborhoods. If you might be relocating in the future, it's a good idea to understand how long homes sit on the market before selling.
Of course your individual circumstances will give you different results to the question of whether to buy or rent, but I hope this blog helps you understand what questions to ask in your search for an answer.
If you are thinking about buying a home in the DC Metropolitan Area, give me a call to Get Started.
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