To Buy or To Rent... That is the Question...

Deciding to rent or buy a property depends on many factors, the main being your current lifestyle and financial situation. Everyone’s needs are different based on job, location, family size and budget. We wanted to provide a few ideas to help you decide which is the best option for you. 

The current real estate market can also play a role in whether or not you want to rent or buy. The market will obviously affect home prices, rental prices and land in general. Every person’s situation is unique and will require different types of real estate.

In the past few years, the real estate market has been heavily a seller’s market and we have seen a lack of inventory of homes to purchase. The prices are high and with the interest rates at an all time low, people are able to make their money go further and are still able to purchase homes at these higher prices without much fear of being upside down in them. This can make the choice to rent or buy harder as people want to take advantage of the low interest rates. But you should make sure to do the research either way. 

Renting

When people don’t want to commit to a large financial decision, people usually turn to renting. This can be very understandable as the upfront expenses like the down payment, closing costs, transfer taxes, property taxes and real estate commissions. After the initial investment you are also in charge of paying for your own repairs and upgrades.

Currently, the average rental price in Washington is $1,740 (according to apartmentlist.com in October, 2021) per month. This is thought of as affordable considering the higher rents in the bigger cities in western Washington. 

Advantages of Renting

Renting can come with many advantages that make it favorable to some residents. You can enjoy the benefits of a house, condo, apartment or really any type of property that you choose to rent without paying a fortune at the beginning. Typically, the most expensive part of renting is the security deposit and first month’s rent.

When you are renting you also don’t need to worry about repairs unless you create the damage yourself. The landlord or property management company will handle those for you and typically is an easy process. 

People that rent also have more flexibility to move around as they please. You may have a lease agreement that locks you in for a year or another time frame, but once that is over, you are free to go where you want. With a house, you can’t just pick it up and go without some hefty costs.

Disadvantages of Renting

Renting tends to not be a favorable choice for people that want their payments to go toward an investment. Essentially, all of your rent payments are paying off someone else’s mortgage or income and you don’t have anything to show for it down the road.    

When you rent, you also have to work with the pre existing conditions of the residence you are living in. There are renters’ laws that protect the wellbeing of tenants but if a handle of a cabinet is falling off or some other cosmetic fix that doesn’t affect your health or safety, the landlord is not required to fix it. As previously mentioned, you need to call your property management company to request any repairs for damages. Sometimes this can lead to delays in getting things fixed. Some people like to have more control over the condition of the home they are living in.

Renting is a great option if you plan to live somewhere temporarily and don’t want the responsibility of buying, owning or maintaining your own house.

Buying

As previously mentioned, the average rental price across the state isn’t too high compared to some of the bigger cities in the state. However, the price has been going up in the last few years and isn’t expected to slow down anytime soon. Home values have also gone up which would benefit a homeowner more than a renter with higher monthly rent. 

Advantages of Buying

Since the average home value in Washington is growing and in the seller’s market we have been in, this makes it a prime time to purchase real estate. If you buy a home, your property will likely prove to be a profitable investment. If you were to buy a house today your house values could rise a few percent to upwards of 15% like we have seen in the past couple of years. 

Another advantage of buying a house is the stability that comes with it. You don’t have to worry about an eviction notice by a landlord or having to move out so they can make repairs. This doesn’t even mention the fact that if you stay in your home for more than five years, you can build up quite a bit of equity in your home. 

As a homeowner, you also control the condition of your house. You are free to make repairs and upgrades whenever you want. However, keep in mind that if your home is within a Homeowner’s Association, you may have guidelines as to what you can or can’t do to the exterior of your home.  

Buying is also appealing to people who want their monthly mortgage payments to end and be paid off one day. For example, if the average monthly rent payment is $1,900. This means that in one year, you will have paid over $22,000 without gaining anything in the end. To some, this is not worth the money to be paying that much and not even own the property after all that time. As a homeowner, the money is adding to the equity of your house.

Disadvantages of Buying

Despite many benefits, buying a home does have a couple disadvantages depending on your lifestyle. There is a lot of responsibility to owning a home to be ready for. These can include paying for your own repairs and upgrades, paying property taxes and homeowner’s insurance. You are also responsible for paying large upfront costs to purchase the home. 

Buying a home is a big commitment and requires long term upkeep if you want to make the most of your mortgage. If you aren’t sure you’ll be in the same spot for long or there’s a high chance you’ll be relocating, buying a home might not be your best option. 

Overall, deciding between buying and renting depends on your current financial and life situation. For people needing flexibility, renting will likely be the better option, whereas people that want to put their money toward future investment should look toward buying. 

In either case, we would love to be able to sit down with you and discuss your options. We can help you get into a home or even a rental property that works best for you in your current situation.