With housing prices still low many renters are feeling the pressure to finally buy their first homes. But making the transition from renting to owning is a big change, and not everyone is ready for it.
Here are some tips that will help you decide if you should rent or buy.
When Will You Break Even
Many believe that without rent, you can start building equity in your own property. But don’t expect that investment to start paying off right away. With a down payment, property taxes, insurance and your monthly mortgage payment, expect the five to ten years to put a bite on your finances.
So when does home ownership start to pay off? There are a number of factors at play here, but on average, you’re likely going to break even in 5 or 10 years. In markets with high housing prices, the break-even point can be pushed back to a decade or more.
Learning to Live With Less
Homes are an investment that could pay for itself in 5 to 10 years. However, between the property taxes and monthly mortgage payment, as well as home maintenance fees, the amount you spend on housing each month can rise dramatically, and it may cause a major lifestyle shift for new homeowners. Even with tax benefits that allow you to write off mortgage interest costs, the first several years are going to be lean -- a change that many new homeowners aren’t prepared for.
Before you make the leap, there are a few questions you should ask yourself. Are you planning on staying put for several years? Are you prepared to cut back on luxuries like vacations and eating out? Are you willing to take on the risk that housing values can decrease further?
Taking Care of the House
Making your monthly mortgage payment is only one part of the equation when it comes to owning your own place. Without a landlord to handle repairs, it’s now up to you to tackle the day-to-day maintenance issues that are sure to crop up. As a renter, you can solve most problems with a phone call, but as a homeowner, be prepared to give up a Saturday in order to clean the gutters, or to dip into your savings to hire a plumber.
Interested in renting an apartment in Glen Allen, VA, contact The Gardens Apartment Homes.