For years, homeownership has been the foundation of the American Dream. Are you trying to decide whether to buy a home or rent? Both have their own pros and cons. There are several factors that can help you decide which is best for you: your current finances, long-term goals & plans, and the area real estate market.
Ask yourself these questions:
- What can you afford?
- How much savings do I have?
- Do I want flexibility or stability?
- Do you want responsibility to make repairs?
- What are your goals?
Calculate the difference
The first step in your consideration should be determining what you can afford and comparing the difference in cost and your personal preferences. Typically, rent expenses are fixed for the duration of your lease. The monthly rent can sometimes include other utilities or amenities like water, electric, internet, gas, cable, and etc. Most leases require a security deposit or upfront payment and usually require you to purchase renters insurance. These cost can quickly climb over $1000. When you rent, the landlord generally assumes responsibility for any issues with your unit or house. So rest assured when the faucet starts dripping again or if the air conditioning stops blowing on a mid-July day. Too, remember, after the lease has expired, the landlord can change the rent or re-lease the property to someone else.
Again, first consider what you can afford and how much money you have in savings. When you buy a home, most mortgage lenders will require a down payment of up to 20% of the home's price. But, no need to fear, many lenders today can lend with as little as 3.5% to 5% down. Additionally, expect to pay closing costs. Those are about 2% to 4% of the home's price. With a home, you will be responsible for the cost of any repairs or maintenance that need to be done. These costs and responsibilities can be overwhelming and seem like a large amount of money up front. However, long-term, buying can save thousands. Buying a home is an investment that builds equity. If you later sell your home, you can see that money again.
Pros and Cons
- Flexibility & mobility
- Short-term savings
- No time or money spent on maintenance
- Complex perks & amenities
- No equity
- Limited property control
- Fluctuating rent after lease
- Possible compromise in privacy
- Live the "American Dream"
- Long-term savings (NY Times Buy or Rent Calculator)
- Build equity
- More control, space, and options
- Costly upfront
- Limited flexibility & mobility
- Responsible for maintenance
- Extra costs (cable, internet, trash service, etc.)
Should you buy or rent? Take a look at what you can afford, your goals, and consider the pros and cons. Now is the perfect time to buy in the Nashville area! If you're unsure, our helpful agents at Music City Experts would be glad to talk with you and discuss what best fits your individual needs. Give us a shout, 615.815.1295