Low mortgage rates, and a continuously rising median rent may mean you should consider purchasing a house. In today’s market there’s great opportunity for current renters to make a move into homeownership that stretches each dollar a little bit further.

Ask youself: “Should I continue renting or is it time for me to buy?” The answer is different for everyone. It depends on your current situation and your future plans. So what should you consider when deciding if you’re ready to own a home of your own.

1. Rent Will Continue to Increase

The cost of rent is one of the top reasons why renters decide to move. In most cases, rent will continue increasing each year. As noted above, the U.S. Census Bureau recently released its quarterly homeownership report, and as the graph below shows, median rent is climbing year after year. When you own a home, you’ll lock in your monthly payment for the life of your loan, creating consistency and predictability in your payments.

2. Privacy

When renting, your landlord (property manager) has access to your space in case of an emergency. There is likely a language in your rental/lease agreement that gives them permission to frequently inspect the property. Owning the home means you’re the one to decide who can come inside. Given today’s health concerns around the pandemic, this may be a growing priority for you.

3. Freedom to Customize

This is a big decision-making point for many people who want to be able to paint, renovate, and make home upgrades. As a homeowner, you have the freedom to decorate and personalize your home to truly make it your own. In many cases, landlords determine all of these selections and prefer you do not alter them as a renter.

4. Building Equity

Equity is the balance between what the property is worth and what is owed on it. If you owe $100,000 on a $200,000 house, you have $100,000 in equity; it’s what you would have left over after selling the house. In most markets, property values increase over time – sometimes as much as 5% annually. Each monthly payment you make on your home also increases your equity since a portion of the payment goes toward the principal amount. If you own your home, the benefits of your investment go directly toward your net worth. This is savings you’ll be able to use in the future for things like sending children to college, starting a new business, buying a bigger home, or simply downsizing to save for retirement. When you pay your rent, your landlord earns the equity the property gains.

5. Tax Advantages

When you own your home, there are additional advantages that work in your favor as well. You can deduct things like your property taxes, mortgage interest, and home office expenses. (Always make sure you check with your accountant to see which tax-deductible benefits apply to your situation). When you rent, however, the tax benefits are directed to your landlord.

6. Flexibility for Relocation

Renting may make it easier to move quickly should you have a job transfer or simply decide it’s time for a change. Having a home you need to sell might take a little more time. Today, however, with the housing market’s low inventory, this may no longer be the case. Homes are selling at a record-breaking pace, so you may have more flexibility than you think.

Bottom Line

It’s up to you to decide if you’d prefer to rent or buy, and it’s different for every person. If you’d like to learn more about the pros and cons of each, as well as resources to help you along the way, let’s connect to discuss your options. This way, you can make a confident and informed decision with a trusted expert on your side.