In today’s economy, it might seem appealing to buy a home. Interest rates and home prices are at historical lows, tempting many life-long renters to finally ditch their leases and take on mortgages. Before you make the final step into a 30-year commitment, check out these reasons why you should keep renting.
Nobody knows how low the market will go
Unless houses are free and mortgage rates are 0, there’s always room for the economy to slide down. Don’t let the media hype of rock-bottom mortgages and house prices tempt you into buying a home before you’re ready. You should hold off on buying until it feels right for you, so listen to your gut and not what the popular culture is saying.
Even in a seller’s market there are deals to be had, so whether you buy now or years from now, you’ll be able to get a bargain if you just hold out for one. Even the cheapest houses come with a price these days as many of the bank-owned properties are in disrepair and require a lot of expensive repairs.
When you rent, someone else takes care of the maintenance
We’ve all heard our friends exclaim about how excited they are to mow their own lawn and pull weeds in their own flower beds, but maintenance is not all that it’s cracked up to be. Sure, mowing your own lawn will be fun the first couple times, but once your lawnmower breaks down or you have to find time in a busy weekend to do maintenance you’ll be wishing for the days of the lawn service to return.
Appliances are expensive
Most rentals come with appliances, but when you buy a house you’re responsible for furnishing everything from the fridge to the toaster. If an appliance breaks, you’ve either got to repair it or replace it, neither of which is cheap. For renters, a broken fridge is only as much of a worry as the next call to the maintenance man. Count your blessings the next time the dryer acts up or the ice-maker jams and your resident handy man appears in no more 24 hours to fix it.
Property taxes are no fun
With the declining market and similarly declining home values, more and more towns are increasing their property taxes to make up for lost revenue. Unfortunately, property taxes are usually the result of a formula taking into account the market value of the house. When the value goes up, property taxes rise with it. Since home values declined so sharply, property taxes had to grow in proportion. When the market comes back, a fresh wave of homeowners that bought during the down market will be priced out of their homes by unaffordable property taxes.
Flexibility to move
Very few people understand what it’s like to truly be stuck somewhere more than a homeowner with an underwater mortgage. When you owe more than your house is worth, you’re faced with a situation where you can either sit tight and wait for the market to improve or move on and take a steep credit hit that will leave you unable to get future financing on just about anything for 7 years. Neither choice is good. Renters on the other hand can pack up and move to another location whenever their lease expires.
In a down market it makes more sense to rent than to own. While owning may seem appealing due to short term discounts and savings, in the long run owning a home can be an expensive endeavor. If you are dead set on buying a house, choose one that’s a bargain and is located in a good neighborhood that’s highly sought after. You always want to look at a house in terms of re-sale value just in case you need to make a sudden move.