4 Instances When Purchasing a Home Is Actually Cheaper than Renting
The argument between buying and renting is much like the chicken and the egg. There are many people that say renting is a much better option than actually buying a home, especially when you consider maintenance costs, taxes, and rising interest rates. Throw this all together with the volatile housing market and the face that your home could actually lose money and things might look bleak for those looking to actually buy a home. While it might seem like a poor time to buy a home, there are actually a large number of benefits that are associated with owning your own home. Once the home is paid off, you won’t have to worry about additional payments, you can do whatever you want to the home, and you won’t ever have to worry about someone kicking you out as long as you are making your payments. Here is also a quick look at some instances when buying a home can actually be cheaper than renting.
1. When Local Home Prices Are Dropping
Now, people aren’t necessarily rushing to Detroit in hordes. However, it’s become cheaper to purchase a home there than in many other parts of the country. And if you’re not into cold winters, try purchasing a home in San Jose, San Francisco, or Honolulu, where the large expense gap between renting and owning has begun to close. You can also find low home rates in areas that are farther away from main cities. While your home may be located in a small town, you more than likely will still have access to large cities that are in your area and it is very likely that the town will begin to grow as the population in the country continues to expand, increasing the value of your home.
2. When You Can Be a Landlord
If you’ve found the home of your dreams, but it just so happens to be a duplex or come with a garage apartment, ownership might be financially feasible. By renting out a part of your home to others, you might be able to completely cover your mortgage, which essentially will allow for you to live in your home for free. The only things that you will need to keep in mind are the taxes and other fees that you will need to pay. The real problem with this option is that you will have other people living on your property and in a part of your home, which means that you will need to deal with other people being always around. There is also the additional expenses that you will need to pay for repairs, appliances, and some of the other expenses and issues that come with renters.
3. When You Plan to Stay 5 Years
Renting is expensive over time because landlords can legally raise your rates. Often times, you will end up paying hundreds of dollars more than your initial rates that you had when you first started renting. Studies by the New York Times show that home ownership makes more sense after an extended period of time, especially if you are planning on spending more than 5 years in your home. It is also possible, if you find a cheaper home and get a good mortgage, that owning a home can be much cheaper than renting even if you are only going to be staying there for a couple years. Rent-to-own programs may also benefit you if your landlord is selling the home that you are renting, yet you do not want to move.
4. When You Can Get Assistance
If you qualify for grants or loans with special interest rates, you might be able to avoid the large expenses of interest and large down payments. Some cities will also have programs that encourage people to buy homes in older neighborhoods that need some renovation. These financial programs will usually pay your down payment for you and offer a good mortgage, though, you will need to live full-time in the home for a specific amount of time if you want to avoid repaying the down payment or owning expensive fines. A local Lake George Real Estate agent can help you determine whether you qualify for any programs when you are buying a home, and they can also help you to find the homes that qualify for certain benefits that can greatly reduce the costs of home ownership.