Renting vs. Buying a Home
Both have their perks. Which move makes the most sense for you and your needs?
Some folks may be ready to find a forever home, whereas others are looking for a short-term space to start their next chapter. Ultimately, there are two options in life (besides living in your parent's basement): buying a property or renting someone else's property. Both options have their pros and cons, and most people find that they will rent and own at different times of their lives. There is no ‘one size fits all’ in life.
At Nichole Willey & Team, we are here to provide the knowledge and resources you need to achieve your ideal living situation. The real estate market is experiencing record-breaking activity. Combine this with the remote-work revolution, and no matter where you are at in life- there is likely something out there that will work for your needs.
Here are all the facts you should take into consideration when daydreaming about your next living space.
Renting | Pros & Cons
Short-term rentals and year-round rentals can be a hot commodity on Cape Cod and in many other areas due to the land restrictions of new builds and migrating seasonal occupants coming to enjoy our beautiful beaches and serene coastal beauty. This means that there are a LOT of rentals available in our market, though unfortunately year-round opportunities for renting are scarce, expensive, and highly sought after.
Regardless of whether you’re looking to rent on Cape or elsewhere, knowing the seasonal and geographical attributes of the location you are searching in is always a great place to start. Once you find your desired location, reviewing the pros and cons of renting is vital.
Pros of Renting
It’s a short-term commitment. Lease time frames can range from month-to-month to multi-year leases, depending on the property. There is usually an option to sublease or pay a fee to break a lease if at any point you may need to move.
Predictable monthly expenses. A set rent could potentially include other expenses like water, internet, electricity, making the one sum fee easier to prepare for.
You are not responsible for repairs. Having someone on the premise one service order away can be very helpful in the instance appliances break or other home issues.
Access to amenities like a pool, clubhouse, beach access, gym, mail room, trash collection and more.
Cons of Renting
Only minor changes to the space can be made within the restrictions of the lease agreement. So you may be stuck with white walls and beige wall-to-wall carpet.
Breaking the lease agreement could result in the loss of the security deposit. Don’t be afraid to ask!
In the case of larger apartment complexes or urban locations, square footage and outdoor privacy may be more compromised.
Your furry friends might not be welcome in many rental properties due to potential liability and damage issues.
You are not building any equity, and essentially are paying someone else’s mortgage and earning them equity over the term of your lease.
Buying | Pros & Cons
If you are ready to devote the time and money it takes to invest in a property of your own, the hard work will absolutely pay off. Although the prerequisites are greater than signing a lease for an apartment, owning a home can bring both tangible and intangible benefits. Being a homeowner not only gives you complete freedom to make decisions about the design and structure of your home, but a sense of stability and pride.
Purchasing a home can be a long process filled with uncertainty, compromise, and negotiation. For these reasons, about 9 in 10 people will use a real estate agent to help them on their home-buying journey. These pros and cons will help you decide if becoming a homeowner is right for you.
Pros of Home Ownership
Owning a home is one of the most universal ways for an individual or family to build wealth, rather than dumping cash into monthly rent.
You are in control! Feel free to paint your living room bubblegum pink, and add bidets to every bathroom. The good news? These upgrades can add to the overall value of the property. Keeping documentation of every repair and upgrade made can add thousands to a home value.
Not only could a homeowner see a return on their investment when they decide to sell, but a home can also be a source of income as a rental. Owners can choose when they occupy the property and when it is available for rent, listing independently or with a rental company.
Certain homeowners may benefit from certain tax deductions. The home mortgage interest deduction reduces any out-of-pocket expenses during the early life of the loan, as long as deductions are itemized. Be sure to check your local laws.
Cons of Home Ownership
Requires a large financial prerequisite. Whereas renting could only cost you a start-up of the first month's rent and a security deposit, deciding to purchase normally requires lenders and large down payments. The average first-time home buyer puts around 6% down, plus any closing fees.
A home's market value is subject to change at any time based on multiple factors. While long-term historical trends are ALWAYS positive, depending on your plans, the short-term home value volatility may affect your plans. Homeowners should stay up to date on their properties rent value, sales history, homes sold near you, market conditions along with any other related data publicly available.
Homeowners are responsible for all repairs and updates. Unexpected costs of buying a home like closing costs and insurance also have to be taken into consideration.
Depending on your desired location, town taxes may add a substantial amount to your expenses. Be sure to check the county property tax rates.
Searching for your next home should be an exciting journey, whether you plan to rent or buy. The best place to start is to assess your goals, and then compare them to the reality of what you can financially achieve. If you have any questions, a trusted local real estate agent is always there to help. If you are searching on Cape Cod and the South Shore, Nichole Willey & Team has over 15 years of hyper-local market knowledge to help you on your journey. From beach-front condos and short-term rentals to quiet country estates, Nichole Willey & Team can help you find their next property. Not looking in our market? We have a network of over 130,000 agents all over the world that we would be happy to interview on your behalf to help connect you with the perfect agent for your needs in your market, free of charge.
Wondering what you can afford in today’s market? Use our handy-dandy (free) mortgage calculator to give you a rough estimate of your buying power. Visit nicholewilley.com and navigate to our mortgage calculator page!
Not sure what’s available in your area? Use our free home search tool to browse home listings. Just enter your desired town, village, or neighborhood, it’s that easy! You can refine your search results based on your needs.
Need additional help? We would LOVE to hear from you, any time, any day. Let’s chat! firstname.lastname@example.org | 508-737-3567 | sellmyhomewithnichole.com