Buy or Rent? What should you do?

Buy vs Rent Postcard1

Thinking of buying or renting?

Do you sometimes think you are throwing away your money on rent?  With home ownership there are many advantages as shown in the graphic. But one of the biggest advantages of home ownership is that at the end of the time period of your mortgage you will OWN THE PROPERTY and your monthly expenses will be greatly reduced!  With renting, you will never own the property, but you are buying it for the landlord!

Cost of renting

Did you know that the average cost to rent in the Central Alabama area is over $800/month?   That amount is strictly for your rent to the landlord and does not include your renters insurance, any fees, or utility costs that you need to pay in addition.  (Data from the US Census American Community Survey).

Even if you are spending less than the average of about $800 each month for your rent, take a look at this chart. You can see how much money you will spend each year as you continue to rent.  And if you are spending more, you may be even more shocked to see just how much you will have paid over the course of just a few years!

Cost of Renting Over Time

Cost of home ownership

The median total monthly home owner costs are under $1200/month in our area.  This value is the monthly median housing expense for all homes with a mortgage in the area .  The statistic includes the median cost of the mortgage AND taxes, insurance, and utilities.  (Data from the US Census American Community Survey).   And of course your monthly mortgage payment and housing expenses may be significantly less or more than $1200/month depending on the price of the home you purchase and your financing terms and operating expenses.

In our area we are fortunate that there are a number of affordable homes available.  Our  median  home value is between $122,000 and $141,000 depending on the county, well below the national median home value of $203,000 for homes with a mortgage.  (Data from the US Census American Community Survey.)   We also have a number of financing programs available to individuals that require little or no money down and will consider purchasers with credit scores in the 600 range (and above of course!)  You don’t need a ton of money or have perfect credit to purchase a home.

Is renting or buying right for you?

Keep in mind that although owning your own home can be a great option, it is not for everyone.  Here is a great article to give you some of the pros and cons to renting vs buying. It will give you ideas to consider for your particular situation:  When to Rent Vs Buy

If you want to do some more research, feel free to take a look at this rent vs buy calculator provided by Realtor.com. You can see how things look for your situation.  https://www.realtor.com/mortgage/tools/rent-or-buy-calculator/

Want to learn more?

Interested in sorting out your options or learning more about how you can make home ownership a reality? Please contact me . I’m happy to help you get started.

 

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