Should I rent or buy in today’s market? Before deciding, ask yourself some key questions that should aid in you arriving at a well-informed decision.
A question that I receive fairly regularly is, “Am I better off renting or buying?” Truthfully, there isn’t a one-size-fits-all answer to this.
To demonstrate the complexity of the issue, the Capital Region Business Review recently released a study in which they opine that you’re better off buying than renting wherever you are in the market. As much as I respect the publication, I think the article oversimplifies, and is reductive of, the problem.
There’s a series of questions you need to answer for yourself before making the decision between renting or buying—questions that the article doesn’t address.
You can certainly look at the average rent and average mortgage payment in a market and compare them against one another, deducing that average rent comes out to be higher. But the considerations that go into this decision shouldn’t end there.
For one, I always ask my clients about their time frame For example, if you only plan to only reside in your New York state property for fewer than three years, it can be very difficult to make up closing costs on the purchase of the home in that time. Now, if you plan to stay put for over three years, you’ll generally be OK to buy.
But New York state is known for having some of the highest closing costs in the country—you’ll pay closing costs when you buy and then transaction costs to your Realtor upon the sale.
Beyond that, it’s important to have a sense of the market’s present state: This means examining whether homes prices are going up or down. It’s not enough to settle on the fact that rent costs may exceed that of a mortgage at a given time; imagine purchasing a home valued at $100,000, only to see its value plummet in three years and find it’s now only worth $80,000. You’ve saved on the mortgage payment, but your home’s value suffers.
Another factor to consider with homeownership is lawn care and other home maintenance. Is this something you see yourself enjoying? Many of my clients would rather not deal with it; they’d rather see their time go to weekend leisure activities like kayaking, hiking, etc.
If you have any questions about your specific situation, please don’t hesitate to give me a call at 518-461-9937. I’d be happy to provide you with a free consultation where we can do a thorough analysis of the variables involved with your situation and determine if renting or buying is best for you.
And, of course, please give me a call for any other real estate-related questions as well. I look forward to assisting you!