I know that renting a home seems convenient and there are some circumstances where it may be warranted, but have you thought about all of the downfalls of renting a home and then the upside of purchasing a home ?
First, while many rentals come with lease agreements, often times owners simply do not renew the lease the longer the tenant stays. Whether an oversight or simply just not worried about it, not having a signed lease each year can leave you vulnerable to an owner sending you written notice to vacate because you are now on a month to month basis. It is important to check the laws in your state and determine how much notice a landlord must give and if your lease automatically rolls over and for what duration of time. Whether you are year to year or month to month, at the end of the year or the month you have no control. Everything you have ever done to make that house a home can be taken from you on a letters notice because it never was your house.
Let’s say the home starts to need repairs and the landlord cannot afford them or doesn’t want to invest too much money without a return. In this case the landlord, especially if you do not have a lease or the lease has expired, can at anytime decide to sell the house. While some landlords may allow or even want you to stay, so they can continue collecting rent until the house is sold, it is important to note that even with 24 hours notice you may find yourself inconvenienced with showing the owners home. While most Real Estate Agents require loan pre-approvals, anyone and everyone can be walking through the home that you have been calling yours. In some cases landlords may need to perform upgrades, fix things and do other work as prompted by his Real Estate Agent which may very well make you in the way. That would be a reason to provide written notice to you asking you to leave within a certain amount of time.
There could also be other cases where you simply don’t have the best landlord. Cases where some are not prompt in fixing issues in the house and simply do not care about their property. So, the convenience of calling upon the landlord to fix issues that you wouldn’t have by owning a home, may not be the best method of thinking. Most landlords are in the rental business to make money, not lose money. While upkeep and maintenance go along with any home, including homes that are rented, some landlords do not share that same sentiment.
A lot of things can and probably will go wrong while renting a home. But, did you know that often times you can purchase a home with a monthly mortgage payment that is equal and sometimes less than what you are paying in rent? Did you know most mortgage loans include both taxes and insurances and they are not separate expenses you must incur during the duration of the loan? Did you know that you could open a separate savings account and save $100 a month to help cover any expenses that may occur like if your heating and air conditioning goes out or your roof needs to be fixed? Did you know that you can pay for a home warranty that will help with expenses in the event an appliance breaks down and some of them even cover heating and air conditioning units?
Owning your home is an investment. Not to mention you get to call the shots. No more asking for permission to paint a bedroom your daughter or son is so eager for. No more asking if you can adopt a pet. No more waiting and wondering if an issue will be fixed or when. More importantly, it means you are paying your own mortgage not someone elses. These days landlords look to their tenants to pay their mortgage, taxes and insurance and they still want to make a profit. If you have looked around rental prices have only continued to climb. Some states are worse than others and in some cases, in some areas, rent is higher than current wages can sustain.
Let’s take a very conservative look at rental prices in Lake Arrowhead for a 3 bedroom 2 bath home. While prices can range from $1800 to $2500 let’s take $1800. Now, if you are in another state where rents are even higher, these prices may not apply to you, but you will get the idea.
$1800 monthly rent x's 12 months = $21,600 !
THAT is what you have paid annually to someone else with zero return on your money. You will never get that money back. In fact, it has probably paid the homeowners mortgage, at the very least it has paid his homeowners insurance and his property taxes and probably a couple vacations if his house does not have a mortgage.
If you have never owned a home before I know the home buying process can seem scary. While it does come with a lot of responsibility, you have already been responsible, the only difference is that you’ve been responsible for someone elses house! There are many programs out there for first time home-buyers that a trustworthy mortgage broker or your bank would love to you walk you through. The first step is finding a Real Estate Agent who will work with you and your lender and help you every single step of the way.
Whether you are a seasoned home owner or a first time home-buyer I would be honored to work with you. Please, don’t hesitate to call me. We can set up a time that is good for you and discuss your options.