Buying vs, Renting Real Estate: Which choice is right for you?
When it comes to Buying vs. Renting Real Estate everyone has heard the old line that renting is just throwing away money. But is buying really better than renting in all situations? The answer to this question depends heavily on individual reasoning, financial situation, and short-term and long-term goals. As an Arizona Real Estate qualified buyer’s agent, let’s break down some of these questions and find out if real estate is right for you.
The first thing to look at is pretty simple: Can you afford to buy a house? No matter how good a deal you find or how much property values are rising in your area, it just won’t be possible to buy a house if you’re already overloaded with credit card debt or can’t scrape together enough money for closing costs. While banks will often work with buyers to help them get adequate financing, it’s often a good idea to rent for a couple of years while you sort out any messy financial situations.
Additionally, understanding the various aspects of the lending process; what documents will need to be in order, what are acceptable debt to income ratios, what types of loans are available to you, and what dollar range can you be approved for are all part of the home buying process. Often times speaking with a mortgage professional can help you to determine your qualification status by completing a mortgage pre-qualification. Having the expertise of a knowledgeable real estate agent on your side can help you to prepare for the home buying process even if you are not yet able or ready to buy.
Cost of Living
Once you’ve determined that you’re in a good financial position to buy a home, you’ll need to take a closer look at your local real estate market. The pricing ranges of homes in your area can vary drastically depending on what amenities you require, proximity to freeway access, the local schooling systems, or even the businesses which are established in your neighborhoods of interest.
In more expensive areas, property values can be significantly higher than rent levels, which means that your monthly mortgage would be higher than the rent on an equivalent living space. That doesn’t even take into account the down payment on an expensive property, which can be prohibitive. In other areas, though, a modest up-front investment can get you a great home with a lower monthly cost than you’d pay in rent. A good buyer’s agent can help you figure out the situation in whatever market you’re in, whether you’re looking at Mesa AZ real estate, East Valley real estate, or high-priced mountainside condos.
It’s also important to take into account the timing of your purchase. Even if you’ve got the money for a house and your buyer’s agent assures you that it makes sense in your market, depending on your long-term and short-term planning buying a house can be a questionable decision.
If you intend to be in the house for just a couple of years, closing costs will often wipe out what little equity you’ve managed to accumulate, leaving you no better off than renting. If you’re in it for the long haul, though, a purchase can be a great idea, since you’ll have the twin forces of equity and appreciation improving your investment over the years. In the local Arizona market for instance, many home owners are experiencing price resurgence in their home equity. For those who purchased after 2009 they have seen an increase in the home values and as such have found that home ownership has proved to be a more lucrative decision.
Whether you are ready to buy, or renting and thinking of purchasing a home in the future, there are many things to consider. Home ownership is one of the greatest benefits of living the American Dream but it does not come without some inherent concerns. It takes both personal and professional knowledge to decide if buying a home really is better for you than renting. While you’ve got the personal information already, a trained professional who knows local East Valley real estate and Mesa AZ real estate can be a valuable asset in deciding if the timing is right for you to take the plunge.
Kenyon Realty Agents are experienced agents who are willing to work for you to ensure that you get the best possible outcome. If you’d like more information please contact us today: 480.832.1331
Susan Celano, and the Kenyon Real Estate Team