My past customers and clients include families
who have purchased a home from me and, possibly, more important, people who
have rented a home from me.
I would not be doing my job as
a Real Estate Professional if I did not highlight reasons while most people own
their own home. While renting is a good
option for a lot of families, there are also good reasons to purchase a home
and a lot of times, that doesn’t mean just because of the financial aspect, it
may also have to do with the position you’re in in your “lifecycle”.
For older persons, say 65 or
older, who have sold their primary home, it may not be a good idea to by
another home, but instead it may be worthwhile for them rent, especially if
they’re on their own.
Also, if it’s a very volatile
market, either completely a seller’s market or completely a buyer’s market, in
those times you may need to decide if you are in the position to become a buyer
or a tenant. Only you, along with your
real estate professional—me, can make that decision intelligently.
My blog gives you 3 Good Reasons to Rent and 3
Good Reasons to Buy. I hope you enjoy it!
3 Good Reasons to Rent
Here are
my 3 good reasons to make the decision to rent a home.
1) You want to maintain flexibility and mobility.
What
I mean is our younger generation is actually living in a “mobile” age where
people like to keep their options open.
While they may be single, or simply sharing the rent, this part of our
population does not want to be tied down to home ownership yet. Instead, they want their weekends open to
hike, ski, travel, or just simply kick back.
People are getting married later in life and have children in their 30s
rather than their 20s. The other thing
is that few people, even those who love their jobs, believe that they are going
to work for the same company for their whole career. Lots of times, renting becomes the option for
that person to move ahead with their career and gives them the ability to move
to wherever the job or career calls for them to go. If you are at that point in your career, it
makes sense to have flexibility.
2) You need to repair your credit history.
An
unfortunate consequence of the recent economic downturn over the past few years
is the number of people with blemishes on their credit history. This may be a family that was foreclosed upon
and is forced to be a tenant.
The
truth of the matter is, that’s a good sign!
Those people are able to rebuild their credit history within two years
and then already know about home ownership, like it, want it and will be the new
buyer.
If
this is you, please make sure that you pay your rent on time and by check,
because when you either go to rent a new home and/or apply for a mortgage, you
want to make sure that you use paying your Landlord just as a bank would use
your paying a mortgage as a good part of how your credit score is
determined. Keeping record of paying
rent on time will go a very long way.
3) You need to save for a down payment.
We
all know how hard it is to save money and renting offers you the opportunity to
save for a down payment to purchase your own home. For many, renting is the short-term solution
for their housing needs while they save up for a down payment; and, as the
mortgage industry tends to loosen, the amount of the down payment may in fact
drop below 5% in certain cases. Never
make the determination yourself that you cannot afford a mortgage, always let
the bank tell you if you cannot afford a mortgage.
3 Good Reasons to Buy
And now,
here are 3 good reasons to make the decision to buy a home.
1) Building investment equity over time.
The
biggest reason to own rather than rent is to build equity. Every time you make a mortgage payment, you
are reducing your principal and building equity. So, it’s a forced savings plan that simply
grows and grows and grows.
In
the best case scenario, and if you can afford it, I always advise my clients to
go the least amount of time in amortizing their mortgage. That way, in a very short period of time,
you’ll see how much of your monthly payment will become part of your principal reduction. And, with the principle reduction, the equity
and then the positive appreciation, it’s just a perfect formula from which to
profit.
2) Leveraged Appreciation
Most
people understand the concept of appreciation—it’s the increase in value of an
investment over time such as when a stock goes up in value. But most people forget that appreciation in
real estate is actually leverage appreciation.
For example, if you buy a stock, you pay for it in cash, 100%. When you buy real estate, you only have to
pay 5% - 10% of the value in cash and the rest is financed or leveraged. Now, if the stock (or your home) appreciates,
you’ll be able to see how much your investment has grown; and it continues to
grow the longer you occupy your home.
3) Home Ownership is American
Probably
the single most important reason to own a home as opposed to renting is in
America, we all have grown up with the idea of wanting home ownership. Yes, we understand the appreciation, the
building of equity and the reduction of principal from our mortgage, but
another big reason is simply the pride of owning your own home.
I remember my first home and how excited I was
to paint the inside, and landscape the outside of the property, and it just
felt good to do it.
As your family grows, and children enter the
picture, home ownership is practically a must.
So while the benefits are there financially, the wants and needs of
owning your own home is something that is truly an American Dream.
Well, I hope that’s given you a few tips as to
why there is no right or wrong answer in buying or renting, it’s simply a
decision that’s determined based on the many factors in your life.
So, if you ever need to rent or purchase a home,
please don’t hesitate to give me a call.
You can always reach me at (570) 421-8950, Ext. 353; my dial direct at
(570) 269-4103 or via email at skern@wilkins1.com. In my line of business, our most important
asset isn’t real estate…it’s you.
Sonia Kern, Realtor, has been with Better Homes and
Gardens Real Estate Wilkins & Associates for 5 years. During that time, Sonia has, year after year,
been a member of the “Top Ten” who are those Agents that are the Top Ten in
Sales volume each year; was awarded Outstanding Salesperson 2014, and has been
a member of the “Million Dollar Club” for the past 6 years. Sonia has received recognition from her peers
on both a local and national level. Said
Thomas R. Wilkins, CEO, “Sonia is one of the most trusting Real Estate professionals
I have met in my 35 year career.” “In
addition to that, whether you need to rent, want to rent or are considering
making a decision between renting or buying, you can trust Sonia in always
putting your welfare first.” added Wilkins.
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