Rising rent prices have become a reality for many Americans. As a renter these days it’s easy to feel like a large portion of your paycheck is gone the minute you earn it, leaving you with little to cover other monthly expenses. You’ve thought about owning your own home, but not everyone wants to deal with the responsibility that comes with homeownership or having to figure out the financing. If you are on the fence about buying a home, you may be happy to know that there are options that can make this goal attainable.
With rent prices rising, should I buy a home?
Rents have seen a sharp increase over the past year, with the nation’s median rent price soaring to $1827 per month, a 17% increase over the past year.
Current predictions have forecasted a continuation of this trend, with rental prices expected to top $2,000 in the coming months.
Large metropolitan areas and sunbelt cities have been hit especially hard with even sharper increases. Bloomberg reports that the most significant rent increases were in Austin, TX, Jersey City, NJ and Tempe, AZ. Austin residents, for example, saw rents more than double, and weathered a 108% increase over the past year.
Bottom line is that renters are suddenly finding themselves in a difficult position: Do you stay in your current lease and find a way to cover the monetary gap, do you move to a smaller and/or less desirable apartment, OR do you buy a home?
We all know that buying a home is an investment that can add value to your overall net worth over time. When you make a monthly mortgage payment, you are building equity in your home and investing in your future by adding an asset to your overall portfolio. By contrast, rental payments are building someone else’s equity. In addition, when you rent, you are at the mercy of the landlord, who can choose to raise the rent and price you out with the next lease renewal. If you buy a home, then you are responsible for any repairs and maintenance costs or if you are someone that finds it There are pros and cons to each that each person needs to consider.
We all know that buying a home is an investment that can add value to your overall net worth over time. When you make a monthly mortgage payment, you are building equity in your home and investing in your future by adding an asset to your overall portfolio. By contrast, rental payments are building someone else’s equity. In addition, when you rent, you are at the mercy of the landlord, who can choose to raise the rent and price you out with the next lease renewal. If you buy a home, then you are responsible for any repairs and maintenance costs or if you are someone that is handy and able to do many of the repairs yourself, then that is a cost savings. Either way, there are pros and cons to each that each person needs to consider.
Buying a Home vs Renting
If you are debating whether to buy a home or rent, there are few things to consider like your financial situation, lifestyle, and personal goals. Questions to ask yourself are:
- Which area do I want to live in for at least the next five years?
- How much savings do I need for a down payment?
- Am I ready to take on the responsibility of maintaining a home?
There is no right answer, but with rising rent prices many renters are considering if buying a home is now the better option. You will need to weigh the benefits and the costs of each based on your income, savings, and lifestyle. Here is a rent vs buy calculator that’s helpful to do an economic comparison.
Worried About Financing? Learn About Seller Financing.
Many buyers are concerned about whether they will qualify for a traditional mortgage. Rarely do people question if there is another way to finance the purchase of their home, but there is! One option is seller financing. Seller financing, also known as owner financing, is when the seller provides a loan directly to the buyer. This gives both parties the opportunity to bypass the banks, all their processes and rigid rules that come with a mortgage.
With seller financing, the buyer and seller get to negotiate the terms of the agreement such as down payment, interest rate, and loan duration. This provides both parties more flexibility and allows them to close much faster. There’s also no origination fees or hidden bank fees that are often required with a mortgage. You can learn more about seller financing here.
To help buyers find homes where sellers are ready to offer financing, we offer a platform that specializes in safe and secure seller financing. No wait for a lender or bank to get back to you, or fees paid to a bank and mortgage broker. We have vetted sellers on the platform as well as their listings so you can be assured the homes are verified. And if you have any questions, HonestDeed provides one-on-one customer support to help you navigate the process.
If you’re ready to stop paying expensive rent and want to get into your dream home faster, and more affordably, visit HonestDeed and learn more. Renting versus buying is an important and difficult decision, especially when prices are so volatile. We recommend being open-minded to alternative ways to help you buy and afford the lifestyle you deserve.