Making the jump from renting to owning a home can be a big step. The risks are huge, and the finality of the situation is very real. Switching from one rental home to the next is much easier than selling a home you own in order to buy another. If the conditions are right, however, buying a home can be very beneficial for both your finances and personal sense of security. We have helped countless individuals and families in the Seattle area buy their first home, and we have seen enough to know the difference between those who are eager to own and those who are ready to own. To help you make the right choice, we hope you’ll keep the following signs in mind, all of which indicate that you’re ready to quit renting and consider buying.
Family
The benefits of homeownership really shine through when you’re raising a family. The ability to customize a child’s bedroom or baby proof a house cannot be overstated. Your home will change as you raise a youngster, whether it’s from your own additions or from the unexpected need for repairs, so you may as well reap the fruits of your labor. Alterations to your home can increase its value, but only if you own it. Landlords are also not usually keen on the idea of tenant renovations, making child-centric modifications nearly impossible.
Rent vs. Mortgage Payments
There may come a time when your rent payments become as much, if not more, than a potential mortgage payment. This can happen for a variety of reasons: a lack of rental vacancies, an up-and- coming metro area, or even just your desire to live in a larger apartment. If you find yourself in this position, it might be time to consider buying. Paying rent only lines the landlord’s pockets, while paying a mortgage brings you closer to owning a very valuable asset.
Pro Tip: You can check out a mortgage calculator to weigh your options before looking for lenders.
Your Career is Thriving
There is an old adage that suggests you need to spend money to make money, and it’s true. If you find yourself with excess money, buying a home can serve as a low-risk investment. Market strength should be your indicator here. Look to live in an area that’s starting to gentrify. Property values are likely to be on the rise, and you could see a substantial return well before your mortgage is paid off. On the other end of this spectrum, renting in a gentrifying area can be a nightmare. An influx of people will cause vacancy rates to drop and rents to rise. Getting a piece of the pie while you have the excess income will pay handsomely in the long run.
Pro Tip: Mortgage interest is very often tax deductible. Check with the IRS and an accountant after purchase to see if you qualify.
If you fit into any of our three scenarios, we strongly suggest talking with a Realtor. Happiness, state of mind, and net worth can all be improved through homeownership. If you would like to explore home ownership further, contact me at (206) 465-7215 or via email at phil.greely.
