Understand the arguments for both, and weigh the benefits against your own life priorities
A question many adults face in Florida is whether or not they should purchase a home, versus continuing to rent a property.
While there are pros and cons to each, it's perhaps most important to figure out which option best aligns with your personal goals, priorities, and finances.
Here's a look at all the factors you need to consider before deciding.
Pros of renting
Even though “homeowner” has a nice ring to it, there are many benefits of holding off and renting instead. Some pros include:
- Short-term lease agreements
- It's not your responsibility to pay for repairs or maintenance
- Often lower monthly payments than mortgage payments
- Less pressure on your credit if something goes wrong
- Less risk if the housing market changes
Cons of renting
Of course, there are downsides to keeping the tenant status such as:
- You can't change too much about the property so it may feel impersonal
- Landlords can raise the rent year-to-year at their discretion
- No tax deduction benefits
Pros of buying
Buying a home is a big decision, but it can really pay off in the end. Here are some of the many pros:
- No landlord calling the shots about rent
- You can do what you like to the property to make it yours
- Home equity building
- Tax deduction benefit for mortgage interest and property tax
- Less temporary living situation
Cons of buying
Here are the cons of purchasing a home, which may sound similar to the pros of renting:
- Some families don't want to be tied down in case they have to move
- You cover the bill for repairs and maintenance or do it yourself
- More dependence on the housing market
- Property taxes can be high
- Your credit could be negatively impacted, in the case of a foreclosure, for instance
Now that you know the pros and cons to both renting and buying let's look at how you can figure out what your priorities really are.
Prioritizing home concerns
The above pros and cons will vary based on what you and your family actually consider to be a pro or con. To figure that out, think through these factors.
- Control. How much control do you want to have over what can or can't be done with your property? If you are ready to be in charge and responsible for everything that makes a home run, you're probably ready to buy. Just keep in mind that many homeowners' associations (HOAs) in Florida do have guidelines that community members must follow, including how the exterior of your home looks and is maintained.
- Risk. Depending on where you are in life as far as investments and savings, consider how much of a risk it would be to purchase a property. Remember that once you own, if there's a downswing in the housing market, you could end up owing more on your mortgage than the house is worth.On the other hand, if you're ready to take a risk with an investment, owning a home can end up giving you a big payout in the end while you're building your equity.
- Timing. If you plan to stay in your current Florida city just for a few years, consider that the home purchasing and selling process can be long and complicated. Do you really want to go through all that just to do it again in your next location? However, if you're ready to put down your roots, buying a home can be a smart choice.On a similar note, remember that housing prices across the country may vary by city. So, once you do relocate, you may need to rent for a while if you move to an area with higher housing prices.
- Housing market. Florida's housing market is rated “Very Hot” by Zillow this year because home prices in the state have increased 7.7 percent in the last year. Prices are predicted to continue to rise an additional 5 percent in 2019.
A real estate economist and professor at Florida Atlantic University told the South Florida Sun-Sentinel that young workers who are more likely to relocate may be better off going this route, while more long-term investors could see pretty big returns with the Florida housing market doing so well.
These are some of the biggest factors to consider when making your own pros and cons list. It will start to become clear whether you're ready to buy, or if you would be better off saving up by renting for a while and pursuing other investment avenues.
If you do decide to purchase a home in Florida, our attorneys at Peyton Bolin can help you navigate the entire process. Dealing with the legal side of things can be complicated, so allow us to step in to ensure everything is done by the book. Contact our team to learn more about our real estate law services.