It's the age old question: Rent or Buy? Renting certainly has its advantages and its place in our market. There are several risks and disadvantages associated with renting, though. We sat down with Railey Realty agent Justin Liller to take about the renting vs. buying debate! In more cases than you'd think, a mortgage is actually cheaper than the cost of renting! We also broke down how Rent to Own and Owner Financing situations work and why they aren't always a better solution. Buying a home can actually improve your credit, help you secure equity in your home, and best of all, give you pride of ownership! Check it all out in the video below!
Issues with Renting
While renting is great for several reasons and many situations, there are issues many renters encounter. One of the biggest drawbacks of renting is that all of the money used for rent could have been building equity in the home. Imagine instead of renting a home for five years, you'd been making five years of payments on your own home! Another drawback of renting is that many rental units have restrictions. From a 'no pets' rule to the inability to paint or fix-up the home, it can be disheartening to have little to no control over the space you're living in. There are also some unlikely renters who find themselves renting a poorly managed and mantained unit. Many renters are at the mercy of the homeowner or landlord when it comes to broken appliances or faulty heating units. To top it all off, the homeowner can choose to sell or no longer rent their home. Your lease may protect you from immediately losing your home, but at the end of the day, you'll be searching for a new home because of someone else's decision.
Rent to Own
A question many of our agents get is, "Will the owner do rent to own?" Let's break down exactly what rent to own entails, first. A rent to own agreement is made between a homeowner interested in selling their home and a prospective buyer. The agreement is usually in writing and will specifiy how much, if any, of the rent money goes towards the purchase price, a purchase date, and a structure for the lease. This process can be beneficial if a serious buyer has encountered financing issues that are only temporary and will be able to complete the purchase in a few months. Many sellers do not want to entertain rent to own options because the renter/buyer can usually back out per the agreement, and it leaves the seller back where they started with less time to sell. Rent to own agreements can be very complicated and usually have several contingencies. As Justin explains in the video, he has yet to see a rent to own situation work out perfectly in 12 years of real estate.
Owner Financing
Owner Financing is also a topic that is brought up to agents. Owner financing is when the owner transfers the property to the buyer and accepts payments from the buyer on their own terms. This situation does happen but is very uncommon. The benefit of this situation for the buyer is that they do not need to provide a lump sum up front or qualify for a loan. It allows the buyer to pay the seller on their own terms with what they can afford. The benefit for the seller is that they will have sold the property and will eventually get their full amount. You can see why it's uncommon, though, as most sellers want the full price for their property at the time of their sale.
Benefits of Buying
So what are the benefits of buying? To mirror the biggest issue with renting, the biggest benefit of buying is building equity in your home. You can also take comfort that all changes you make to the home will only add value and incentive for any future buyers or for yourself to use. Updating landscaping, fixing cosmetic issues, or remodeling are well worth the while when you own the home. Buying is also generally less expensive than renting - yes, you read that right! Many monthly mortgage payments are actually less than the going rate for renting a similar home. You're not only paying less a month, but you're building equity, too! Owning a home also generally increases your credit score. A common misconception or sticking point for potential buyers is that they feel buying a home locks them into that home forever. They're not called 'starter homes' for nothing! It's very common to outgrow a home as your life evolves or you start a family. The best part of buying? It's yours! The pride of homeownership is very gratifying.
How to Get Started
Ready to buy? We're here to help! Fill out an online contact form to get in touch with one of our expert agents and start the process! Whether you're looking to buying your very first primary home or your second home here at Deep Creek Lake, our agents are experts on the area, the real estate markets, and the buying process! They'll be able to get you in touch with mortgage lenders, too.
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