How Do I Decide?

 

ARE YOU BETTER OFF RENTING?

Deciding whether to rent or buy is a big decision that requires serious “Where am I now?” and “Where am I going?” sorts of questions. It might be best to keep renting if you want to maintain maximum flexibility for personal or professional reasons, or if jumping into more debt right now takes you out of your comfort zone. Maybe you’re just not ready to face the responsibilities of homeownership: repairs, upgrades, maintenance, yardwork and all the rest. Even thinking about the difference between cleaning an 800-square-foot apartment and a 2,400-square-foot house can make you want to take a seat and a deep breath.

Your local housing market could be working against you, as well. If you live in a hot market with eager house hunters chasing too few properties, it might be best to bide your time until a better buying opportunity presents itself.

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Not everyone can secure a mortgage. Despite the many types of mortgages and federal programs, some people simply do not have the needed credit rating, or they have too much monthly debt to qualify for a mortgage or to obtain the loan necessary to afford the home they want.

Should You Rent or Buy?

Owning your own home is a classic American dream and part of American culture. Right now, more Americans own homes than ever before. Purchasing a home is a considerable financial investment, and does not guarantee that you will save money in the short or long run. The main considerations when deciding between renting or buying a home include your lifestyle, your ability to secure a mortgage and your financial situation.

As part of a lifestyle, rentals fit some people's time restraints. Renting an apartment or home requires fewer maintenance or upkeep requirements compared to owning a home. Renting apartments give people the opportunity to live in trendy, fashionable neighborhoods that may not be affordable when purchasing a home. Renting also allows people flexibility when a job or lifestyle dictates a move.

Not everyone can secure a mortgage. Despite the many types of mortgages and federal programs, some people simply do not have the needed credit rating, or they have too much monthly debt to qualify for a mortgage or to obtain the loan necessary to afford the home they want.

Other considerations are how much you want to invest in a home and how willing you are to let that affect your lifestyle. Dallas real estate, like other great cities in Texas, can be expensive and like all property, may risk unseen expenses such as major repairs, property tax reassessments, or disasters.

Buying a home does not guarantee equity or profit on the sale. Like all investments, a home carries a level of risk. Because there are fees and costs with securing a mortgage, you will pay thousands of dollars up front for your home. Depending on your mortgage and payments it may take years to build enough equity to compensate that expense. If you need to sell in a few years, you may never recover those initial costs. If you move around frequently or anticipate needing to in the near future, you will want to seriously consider the expense of short-term ownership of a home.

Many factors affect the property value of homes, communities and cities. Take the following questions into consideration:

  • Does the community you live in have one primary company as an employer?
  • Does your community have one major industry creating most of your community's jobs?
  • Can a down turn in that company or industry shift the demand for housing where you live?
  • Are the demographics in your community changing?
  • Are fewer people moving into your community?
  • Is the average income in your community declining?
  • What is the likelihood of crime rising or of there being a lack of appropriate funding for schools or city services?

These factors among others affect the property values of entire communities or cities.

You should also consider what will happen to the entire housing market over time. If the economy is doing well homes tend to appreciate in value but in an economic downturn home values tend to stagnate. When you rent, you have more flexibility in reacting to major trends in the economy. When you own, you gain tax benefits by deducting certain home costs from your personal taxes.

Whether it is best to buy or to rent depends on each situation. If you weigh the lifestyle and personal changes and risks you can make an educated choice and make the decision that is best for you.

Legal disclaimer

The material provided here is for informational purposes only and is not intended and should not be considered as legal advice for your particular matter. You should contact your attorney to obtain advice with respect to any particular issue or problem. Applicability of the legal principles discussed in this material may differ substantially in individual situations.

While The Yeatman Team of Ebby Halliday Realtors has used reasonable efforts in collecting and preparing materials included here, due to the rapidly changing nature of the real estate marketplace and the law, and our reliance on information provided by outside sources,  The Yeatman Team of Ebby Halliday Realtors makes no representation, warranty, or guarantee of the accuracy or reliability of any information provided here or elsewhere on TheYeatmanTeam.com.

Any legal or other information found here, on TheYeatmanTeam.com, or at other sites to which we link, should be verified before it is relied upon.

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