"Are You Ready to Buy a Home?” Real Estate Tips
Local Records Office (LRO) is an organization that partners with homebuyers to provide them with important information regarding the properties in which they are interested. By offering details pertaining to local demographics, foreclosure activity, crime rates, educational opportunities, etc., LRO is able to assist prospective buyers in determining not only if the house is worth the investment but also if they would feel comfortable living in the community in which the home is located. But the truth is that there are many different decisions that an individual must make before they get to the phase in their house hunt in which they will call upon LRO. One of the most crucial is whether to rent or buy. The professionals at LRO explain that the answer to this question is not the same for everyone, as geographic location and other factors can impact property values and the overall benefits that come from owning a home.
An article published by Business Insider posed the following question in its headline: “Renting vs. Buying: Which Is the Best Option for House Hunters?” While there is no one right answer, the article has provided the information that individuals need to narrow their options and make the best choice for their particular situation. Here, LRO shares this information and encourages homebuyers to call upon property value reports before making an offer to ensure that they are not overpaying.
The first consideration that potential homebuyers need to make is location. The article explains: “You first need to dig into data on your local market. There’s no one geographic area that’s taking the housing market by storm, but many areas of the manufacturing-ravaged Midwest are a good bet. Trulia points to Detroit, Toledo and Cleveland as some of the most attractive areas for home buying right now.”
The article goes on to explain that Zillow’s Breakeven Horizon index is a great resource for individuals who are considering purchasing a house. This tool allows them to calculate when it will be ideal to purchase a home based upon down payment, purchasing costs, maintenance fees, and utility expenses. Additionally, rent vs. buy calculators, such as the one provided by The New York Times, are great tools.
Local Records Offices says "the next thing that the article encourages potential buyers to consider is longevity". A home is a great investment if an individual plans on staying put for several years. As a rule of thumb, individuals who anticipate moving within the next five years should probably consider renting until they find where they want to settle down. The article asserts that homebuyers can lose six to seven percent of their investment via the costs associated with selling if they decide to let go of their property after a couple of years. If an individual plans on living in the same location for more than five years, though, buying a home may prove a good investment. But the cost of renting, in some places, has risen significantly over the last few years. The article asserts that this increase in rental fees is anticipated to continue, as “Apartment rents are expected to rise by about 4 percent annually through 2015.” As such, it is possible that homebuyers can pay less on a mortgage than they would on a monthly rent payment.
But there are other costs to consider with regard to the expenses associated with houses and apartments; mortgages and rent are not the only ways in which individuals will pay for their housing. Maintenance is a major concern for homeowners, particularly when big budget items, such as the roof or the plumbing, are in need of repair. Additionally, monthly costs, like lawn maintenance, are incurred by individuals who opt to buy. Higher insurance rates are also experienced by homeowners, adding to monthly bills.
At the same time, individuals who are able to take on the costs of such maintenance can improve their investment, as they can increase the value of their home through such activities as replacing the roof or updating the plumbing system. As such, this consideration boils down to how much money individuals can plan to budget for such repairs says Local Records Office.
This leads to another issue to think about before determining whether or not to rent or buy: return on investment. The goal in the real estate industry is to make money on a home, not lose it. Home prices are rising, but they are still, according to the article, an estimated 30 percent lower than the days leading up to the recession. As such, now can be a great time to invest in a new home. While there is certainly the risk of incurring unexpected expenses as a homeowner, it is also true that rent is not an investment—it is a fee that is never recouped.
Finally, the article urges potential homebuyers to consider the upfront costs of purchasing a house versus renting an apartment. Buying a house requires, most frequently, a 20 percent down payment. On the other hand, apartment complexes typically require one month’s rent and a security deposit, the latter of which is refundable. Given this information, the decision between renting or buying is, largely, based upon expendable finances at the time of the move.
The professionals at Local Records Office urge individuals who do opt to buy a home to ensure that they are paying a fair price. By utilizing the reports provided by LRO, individuals can gain integral insight into the value of the property that they want to purchase.