Rent vs Owning

The question to rent and own is something I am sure all of us have asked ourselves at some point in our lives. If that question is something that is always on your mind, maybe you are at the crossroads of deciding which direction you want to take next. Are you ready to be a homeowner or are you comfortable with renting for now?  

In the first quarter of 2022, the average home ownership nationwide is 65.4 percent according to the US Census Bureau. It means a whopping two thirds of the population are living in homes that they own. There are areas and cities that have skyrocketing rent but in terms of shelling out up front cash rent is less expensive since it only requires a security deposit and a first and last month’s rent. On the other hand, if you are looking with a long term perspective, owning a property might be better than renting despite the fact that you need to pay more upfront.  

You may be asking yourself, why would I want to purchase a home with the rate hikes over the past year. As we are nearing the end of 2022, rates are hovering close to 7%. We recently saw a funny real estate meme that stated “I’m not paying 7% interest on a mortgage” Rent is 100%. Although interest rates may be considered high, historically the highest rates were in 1981 at a whopping 18.3%. Check out the historical rates from 1970’s – 2022. History has also shown us that as interest rates are up, mortgage prices drop. We are currently seeing this trend now.  

An average homeowner would usually stay for five to seven years before thinking about selling their place.  Where you are right now may not be your forever place.  Can you imagine yourself in the same community where you are renting right now?  Owning a property may be a better option, since rent might be raised by landlords anytime. You may also be asked to move if your landlord would need to sell or move into the rental for an unforeseen reason.  

Renovations and designs may be limited for you as well. In terms of the financial aspect, you are not getting any tax benefits and also not building equity since technically you are building equity for your landlords.

Owning a property gives a sense of stability. You have the freedom to do whatever you want with your place, follow your own aesthetic and do renovation whenever you want to. While thinking about the financials can be a rather uncomfortable and overwhelming topic, the benefits more often than not would outweigh the disadvantages. Talking to a trusted real estate group like Perez Team Properties will help you see the benefits.  

Being a homeowner will let you build your equity that will be beneficial in the long term. The security of owning your own place is one of the best things money can buy. While you might be required a significant amount of money at the beginning, if you do the computation long term, you might be surprised that you will be getting better terms with mortgage versus rent. Owning a property could add to your wealth portfolio.

Still not sure where to start or whether you are ready to take the next step? Perez Team Properties can walk you through each and every step. Call us to set an appointment or just message us your questions about renting and owning and we will be sure to get back to you right away