Location:
The main factor to consider is location. According to research performed by Florida Atlantic University – on average, renting is a better investment in 16 out of 23 metropolitan cities. Los Angeles, Miami, Seattle and Dallas were at the top of this list. However, when it comes to areas in the Midwest like Chicago and Cleveland, the housing market is booming, which makes buying the better choice. Outside of the location, below are some pros and cons to considered before you plant roots.
Buying Pros:
Pending your city’s housing marketing, if you make good money, don’t have a ton of debt and maintain a solid credit score, buying is great way to invest in your future.
- When you buy a home, it’s yours! You can renovate as much as you want, decide how many pets you have, and you won’t have to answer to a landlord.
- All of your payments go towards your investment, not into someone else’s pockets. Plus, the interest you pay is tax deductible.
- After a few years, you could turn a major profit on your property IF the market is in your favor.
Buying Cons:
Besides location, large amounts of debt, lack of a down payment or poor credit could knock you out of the qualifying running. Here are some other cons to consider:
- A 3.5% minimum down payment is typically required.
- On average, monthly mortgage payments are higher than rent.
- If it breaks, you have to fix it. As a homeowner, you’re accountable for all costs that go toward maintenance and upkeep.
Renting Pros:
When money is tight and savings are low, renting can help you land a great place at good price.
- More bang for your monthly buck. You may be able to afford a bigger place in a more ideal location versus buying.
- Since your payments will typically be lower than a mortgage, you can reinvest in your savings or travel more often. That way, you’re not just “wasting” your money on a home that’s not yours.
- If something breaks, call the landlord for a quick fix!
Renting Cons:
- It’s not technically your home. Which means you will have to ask permission from the landlord to make changes.
- There’s no real return on your investment. When you pay rent, it goes towards the landlord’s future financial endeavors, not yours.
- When your lease is up, the owner can decide what’s next. This may mean a rent increase or even a move out.
1) Lower your student loan payments
If hefty student loan payments are stopping you from renting or buying a new home, you might want to consider a student loan consolidation. Docupop can help you find out if you qualify for an income-driven repayment plan which could potentially LOWER your monthly payments. With a lower payment, you could have more cash on hand to afford the place you really want. Click below to see which options are available to you.
2) Improve your credit score
Better credit could mean a much better place. If you’re looking to buy, the lowest qualifying score most lenders will consider is a 640 or higher. With that said, the average score of buyers who actually landed the deal in 2017 was a 722. Same goes for renting. If your credit isn’t up to par with the landlord or rental company’s standards, you may have to pay a higher deposit or potentially even get turned down all together. If you need to up your score, our preferred partners at ScoreShuttle may be able to help. Their advanced technology gives you full access to your reports and can even help you boost your score.
By following the tips above, your dream home (renting or buying) may be closer than you think.
Resources:
https://thelendersnetwork.com/pros-and-cons-of-owning-home/
Click here for full legal disclaimer.
