Renting vs. Buying: 3 Questions to Answer about Yourself

Renting vs Buying 3 Questions to Answer about YourselfVarious homeownership surveys show that about two-thirds of renters aspire to someday be homeowners. And the National Association of Realtors reports that about one-third of all homebuyers each year are first-time buyers.

Depending on the market, renting vs. buying is often a financial decision, which makes the most sense for a household’s budget. But even when one or the other is less expensive, at least on the surface, homeownership may not be for everyone. When it comes to renting vs. buying, here are three important questions you might ask about yourself.

Are you financially disciplined?

Renting is sometimes described as “throwing money away.” When you rent, you’re lining a landlord’s pockets. You make a rental payment each month, but you’re not gaining any equity in the property. The opposite is true when you buy: You’re paying the mortgage down while the home, presumably, appreciates in value.

In areas where it’s cheaper to buy than to rent, buying might seem like a no-brainer. Paying a mortgage down can be considered a form of forced savings, and if buying is cheaper anyway, it would seem a pretty solid move.

But where it’s cheaper to rent, it can make more financial sense beyond the lower monthly housing cost. If you’re disciplined enough, you could take the savings from renting each month and invest it in something that earns a rate of return. Even if you use the difference each month to increase your contribution to an employer-sponsored retirement plan, you might end up with more money than your equity in a purchased home might provide over the same time frame.

But if you spend the money you save by renting each month, you’re gaining nothing over the long term. The forced savings of homeownership might be a better option for those who are less-disciplined financially.

Are you handy?

Considering more than the monthly payment is important when it comes to renting vs. buying. When you rent, your landlord is largely responsible for repairs and maintenance of the property. When you’re a homeowner, you’re responsible. That responsibility comes with expenses.

One way to look at maintenance expenses might be to consider them part of your monthly cost. For example, if your mortgage payment would be the same as monthly rent, it might seem prudent to buy. But if you add, say, $100 a month to your homeownership costs to cover maintenance, it might not be as attractive.

It also helps to be handy. The more work you can do yourself, the more money you’ll save as a homeowner. When you rent, you pick up the phone and the landlord takes care of problems that come up. When you buy, it will get expensive if you must call a contractor every time something arises. Being able to paint, do light plumbing work, maintain a home’s exterior, and more will save you some money.

Is Your Job Secure?

One of the major reasons people move is because of work. And, often, people move to where the work is. This can be problematic if you’re a homeowner.

Because of the down payment and closing costs required to buy a home – and because the early mortgage period involves paying mostly interest – most homeowners stand to lose money if they sell in the first three to five years after buying a home.

In most cases, the longer you stay in a home, the better off you are financially. Sometimes, because of their jobs, people are forced to move sooner and/or more frequently than they want. And this can be costly as a homeowner.

There are considerations other than pure finances when it comes to renting vs. buying, and the decision is one that’s different from individual to individual. So it’s important to know the answers to some basic questions about yourself when making your individual decision.

 

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In the meantime, check out these 1 click searches:

Beautiful Townhome in Hunters Green $349,900 Pending

17543 Fairmeadow Drive Tampa, Florida

2 Beds 2 Baths 1,747 SqFt 0.090 Acres

This delightful 2 bedroom, 2.5 bath Townhome in the well-manicured community of Copperfield Townhomes boasts numerous updates and a spacious open feel with vaulted ceilings and additional natural lighting and views exclusive to the end units. The kitchen features all new appliances, solid oak cabinets, beautiful quartz countertops, an elevated countertop with additional storage on the back side, and a convenient pantry closet. Beyond the kitchen is the finished lanai, with AC and a large storage room, or step out to the screened-in porch where you can enjoy a relaxing cup of coffee and early morning breezes. The half bath, an interior laundry nook with New full-sized washer and dryer, and the spandrel under-stair storage closet complete the downstairs. Upstairs you’ll find a split bedroom layout with the master bedroom and second bedroom being separated by a bonus space which is perfect for a home office or game room. Both bathrooms upstairs feature new shaker-style vanities with beautiful quartz countertops. The second bathroom offers a walk-in shower with new contemporary tile, while the master provides a tub/shower combination. The spacious master bedroom suite boasts a walk-in closet as well as a wall closet, a linen closet, and two nice-sized windows. Other notable features include a newer water heater (2020), new A/C unit, updated electric, new water softener system,gorgeous wood-look laminate flooring throughout, stylish baseboards, chair rails, full-sized washer and dryer, ceiling fans, and ample closets & storage. The well-manicured Copperfield Townhome community is pet friendly (with restrictions) and offers a sparkling community pool, sidewalks, and maintenance-free Florida living. Take advantage of plenty of parking with one assigned space at your front door and guest parking nearby. Centrally located with easy access to the Veterans Expressway, shopping, restaurants, Tampa International Airport, and beaches, this charming home offers both comfort and convenience.  Don’t miss out. Schedule your private tour today! $299,900 Active

7524 Hollowell Drive Tampa, Florida

2 Beds 3 Baths 1,396 SqFt 0.020 Acres

Look no further! This stunning block home is the epitome of what you've been searching for. Meticulously maintained, it boasts 2 bedrooms, 2 bathrooms, plus bonus add-on rooms. With granite countertops in the kitchen, ceramic tile throughout, and a 2023 roof and A/C, this home offers both style and substance. Freshly painted inside and out, it exudes charm with beautiful stone detailing on the exterior. Enjoy the convenience of no CDD or HOA fees, and relish its prime location just minutes from the highway for an easy commute, close to Tampa International Airport, fine dining, and fabulous parks. Don't miss out on the opportunity to make this income-producing property yours! $379,000 Active

2405 Durham Street Tampa, Florida

2 Beds 2 Baths 1,488 SqFt 0.110 Acres

Welcome home to this lovely open concept townhome in North Tampa. As you walk in, you'll be greeted by an updated open style kitchen, which is not typical for this community. Washer and dryer are located inside the townhome for convenience. Upstairs you'll find two spacious bedrooms each with their own bathroom. Flooring has been updated throughout the home. Lighting has been updated as well with LED lighting in some areas. Another rarity, is a wood burning fireplace which is located on the living room. This townhome offers a rare backyard space which is chic and spacious. It's a perfect place to hangout and grill. The backyard is also fully fenced in and has a storage closet. The community offers a pool and tennis courts as well as ample parking for both residents and guests. The HOA takes care of all exterior and community maintenance. This unit has a newer roof and siding! The location is ideal with easy access to I-275. $260,000 Active

13813 Stone Mill Way Tampa, Florida

2 Beds 3 Baths 1,261 SqFt 0.040 Acres