Renting Or Owning, What Is Better For You?

Reblogger Michelle Carr Crowe,Altas Just Call...408-252-8900!
Real Estate Agent with Get Results Team...Just Call (408) 252-8900! . DRE #00901962 . Licensed to Sell since 1985 . Altas Realty DRE# 00901962 Lic.1985
https://activerain.com/droplet/5khQ

I'm one of the few real estate consultants who will actually help a potential client realistically explore their options and compare renting to owning. Unlike many pop-tart and "app agents" I only want the result that is best for the client. I will take the time to explore what's important to the client at this point in life, as well as the future. Sometimes renting is better and sometimes owning is better.

One important benefit of buying-especially with a fixed rate loan-is the ability to lock in housing costs, which is usually the biggest monthly expense.

 

With the housing market crash in 2008, many homeowners lost their homes and became renters. According to Iproperty Management, “the number of households renting their home … rose from 31.2% of households in 2006 to 36.6% in 2016”. Some choose to rent because it is more convenient for their lifestyle. Those whose job requires frequent moves need the flexibility that a 6-12 month lease agreement gives them so they can move to their next assignment! Many renters believe that renting is cheaper because they do not have to pay for maintenance and repairs. (Not true! Landlords work those expenses into your rent and other fees). Another reason many rent is that they feel like they cannot afford the down payment and closing costs required to buy a house, due to their inability to save much after paying their monthly expenses. That can be true! Nearly 1 in 4 renters spend at least half their household income on rent. In 2017 the “severely” burdened renters’ rate was 24.7% with 24.9% reporting they were “moderately” burdened. Renting also brings some financial disadvantages. Homeowners can take advantage of tax deductions that let them claim their property taxes and mortgage interest. Additionally, there is a big risk that your rent will go up every time you renew your lease, as we know the median asking rent has been increased steadily since 1988!¬Renting or Owning, What Is Better for You? | Keeping Current Matters One of the major challenges with renting is that you don’t have a space to call your own. When you rent, you are paying your landlord’s mortgage, and therefore they are the beneficiaries of the equity gained from paying that mortgage.

Now let’s explore the other side: Homeownership

In the past, we have mentioned the many financial and non-financial benefits of becoming a homeowner. So, let’s just focus on the one big difference between renting and owning, the ability to lock in your housing cost! Assuming you will have a fixed-rate mortgage, your costs are predictable! You will know exactly what your mortgage payment will be for the next 15-30 years. The homeownership rate in 2018 was 64.4%, and has been on the rise. Those households locked in their housing cost rather than wait for their landlord to raise their rent again! What are the disadvantages of owning a home? Well, it is a long-term financial commitment! It is not easy to pack quickly and move. You will need time and good planning to do it in a short amount of time. You need to save your money! Getting a mortgage requires a down paymentclosing costs, and moving expenses. Again, that will require some savings and planning! Unless you have a homeowner’s association (HOA) (and you pay an HOA fee) or a home warranty, you will be responsible for maintenance and taking care of the home. This may range anywhere from regular landscaping to major repairs.

Bottom Line

Like everything in life, there are pros and cons. What is better for you depends on your situation! If you are interested in becoming a homeowner and want to discuss the pros and cons, contact a local real estate professional that can help you review your current situation!

 

Source: Keeping Current Matters | The KCM Crew 06112019

Original content by Jennifer Carstensen 317824
Renting or Owning, What Is Better for You?
In a real estate market where home prices are rising, many have begun to reexamine the idea of buying a home, choosing instead, to rent for a while. But often, there is a dilemma: should you keep paying rent, knowing that rent is rising too, or should you lock in your housing cost and buy a home?

Let’s look at both scenarios and analyze the pros and cons of each:

Renting

With the housing market crash in 2008, many homeowners lost their homes and became renters. According to Iproperty Management, “the number of households renting their home … rose from 31.2% of households in 2006 to 36.6% in 2016”. Some choose to rent because it is more convenient for their lifestyle. Those whose job requires frequent moves need the flexibility that a 6-12 month lease agreement gives them so they can move to their next assignment! Many renters believe that renting is cheaper because they do not have to pay for maintenance and repairs. (Not true! Landlords work those expenses into your rent and other fees). Another reason many rent is that they feel like they cannot afford the down payment and closing costs required to buy a house, due to their inability to save much after paying their monthly expenses. That can be true! Nearly 1 in 4 renters spend at least half their household income on rent. In 2017 the “severely” burdened renters’ rate was 24.7% with 24.9% reporting they were “moderately” burdened. Renting also brings some financial disadvantages. Homeowners can take advantage of tax deductions that let them claim their property taxes and mortgage interest. Additionally, there is a big risk that your rent will go up every time you renew your lease, as we know the median asking rent has been increased steadily since 1988!¬Renting or Owning, What Is Better for You? | Keeping Current Matters One of the major challenges with renting is that you don’t have a space to call your own. When you rent, you are paying your landlord’s mortgage, and therefore they are the beneficiaries of the equity gained from paying that mortgage.

Now let’s explore the other side: Homeownership

In the past, we have mentioned the many financial and non-financial benefits of becoming a homeowner. So, let’s just focus on the one big difference between renting and owning, the ability to lock in your housing cost! Assuming you will have a fixed-rate mortgage, your costs are predictable! You will know exactly what your mortgage payment will be for the next 15-30 years. The homeownership rate in 2018 was 64.4%, and has been on the rise. Those households locked in their housing cost rather than wait for their landlord to raise their rent again! What are the disadvantages of owning a home? Well, it is a long-term financial commitment! It is not easy to pack quickly and move. You will need time and good planning to do it in a short amount of time. You need to save your money! Getting a mortgage requires a down paymentclosing costs, and moving expenses. Again, that will require some savings and planning! Unless you have a homeowner’s association (HOA) (and you pay an HOA fee) or a home warranty, you will be responsible for maintenance and taking care of the home. This may range anywhere from regular landscaping to major repairs.

Bottom Line

Like everything in life, there are pros and cons. What is better for you depends on your situation! If you are interested in becoming a homeowner and want to discuss the pros and cons, contact a local real estate professional that can help you review your current situation!

 

Source: Keeping Current Matters | The KCM Crew 06112019

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Rainmaker
2,886,291
James Dray
Fathom Realty - Rogers, AR
Exceptional Agents, Outstanding Results

Morning Michelle.

Good one that I missed, just keep it up, thanks

Aug 04, 2019 01:00 AM #1
Rainmaker
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Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

Hello Michelle,  Great information in your blog for people to take notes on.  Make it a great day!

 

Aug 05, 2019 11:29 AM #2
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Michelle Carr Crowe,Altas Just Call...408-252-8900!
Get Results Team...Just Call (408) 252-8900! . DRE #00901962 . Licensed to Sell since 1985 . Altas Realty - San Jose, CA
Family Helping Families Buy & Sell Homes 40+ Years

James,

I'm always happy to share helpful and useful blog posts.

Aug 06, 2019 01:06 PM #3
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Michelle Carr Crowe,Altas Just Call...408-252-8900!
Get Results Team...Just Call (408) 252-8900! . DRE #00901962 . Licensed to Sell since 1985 . Altas Realty - San Jose, CA
Family Helping Families Buy & Sell Homes 40+ Years

Will,

I agree, this blog post had good information for consumers to note.

Aug 06, 2019 01:06 PM #4
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Jeff Dowler, CRS
Solutions Real Estate - Carlsbad, CA
The Southern California Relocation Dude

Hi Michelle:

There are some really good points here for both renting and owning a home. Renting may be the best scenario for many for the reasons noted but being aware of the pro and cons can help one make the best personal and financial decision.

Jeff

Aug 17, 2019 01:10 PM #5
Rainmaker
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Esperanza Butler® 818 926 5425
Century 21 Peak - West Hills, CA
Homes For Sale in West Hills, Ca (818) 926-5425

Hello Michelle, great information. Thank you for posting!

Aug 18, 2019 12:35 PM #6
Rainmaker
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Lise Howe
Keller Williams Capital Properties - Washington, DC
Assoc. Broker and Attorney Licensed in DC, MD, VA,

This is information certainly worth sharing - thanks for the post! 

Aug 19, 2019 04:39 AM #7
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