Buying is Always Better Than Renting
You’ve heard it from your mom, your boss and maybe even your favorite newscaster. This is one of the biggest myths in the housing industry. The problem is that while buying is better than renting some of the time, it completely depends on your circumstances. If you’re planning on living in a home for a longer period of time, your house will appreciate on its value and it’s better to buy. If you’re only going to be living in a home for a year, it’s probably better to rent. It’s not only about time, either. It depends on the price of your home, where you’re going to be living and your mortgage. Depending on each of those factors, it could be that you’re better off renting than buying a house!
Want to download Landmark’s Step-by-Step Guide to Determining if You Should Rent or Buy whitepaper? Click here.
So buying is always better than renting? Myth busted! It completely depends on your particular situation.
If You Rent, You Don’t Pay Property Tax
Renters love to bring this up with homeowners, especially when the homeowners are complaining about how much they had to pay for their property tax.
“When you rent, you don’t have to worry about that,” they say.
Not so much! When you rent a home, your landlord factors in a number of expenses into your monthly rent like property taxes and maintenance costs. You might not be paying as much as you would if you bought a home, but you’re still contributing money to taxes.
So: Renting means you don’t have to pay property tax? You won’t pay as much, but it’s still factored into your month’s rent. Myth busted!
Home Maintenance is Expensive
When you rent a home and your furnace goes out, you call the landlord and ask them to fix the problem. When you own your own home, there is no landlord, it’s just you and your home. When something fails, you learn that you either have to go without it, or pay money to get it repaired or replaced. According to US News, a homeowner can expect to pay between 1 and 4 percent of their property value on maintenance, repairs and replacements of systems and appliances within a home. That can get expensive!
Here’s the thing: it doesn’t have to be expensive. Many homeowners decide to purchase a home warranty with their house to protect them against unexpected failures of their systems and appliances. A home warranty will repair or replace a home’s failed systems and appliances for $60 as long as the system or appliance failed from normal wear and tear. A home warranty protects a homeowner from having to pay thousands of dollars when their air conditioner breaks down from old age.
The average home price in San Antonio, Texas is $324,398. A homeowner would expect to pay between $3,243 and $12,975 a year on home maintenance. Compare that to between $425-$625 a year on a home warranty. You can save thousands of dollars on home maintenance. A home warranty makes repairs and replacements manageable to a budget.
Home maintenance also increases a home’s value. As you repair and replace systems and appliances within your house, it increases its value while you pay the same amount of money for a mortgage payment. If the landlord of your rental home did the same upgrades, it would reflect in your month’s rent.
So is home maintenance expensive? It doesn’t have to be with a home warranty. By maintaining and upgrading your home when its systems and appliances fail, you increase its value in the long run. Myth busted!
Always Buy When the Market is Hot
Everyone loves to watch the housing market and base their decision to buy a home off of those trends. However, if you buy a home when the market it hot, and not because you have the financial stability, it’s the wrong time to buy a house. No matter what the market looks like, make sure that you can afford the payments for a house, and purchasing is the right financial decision.
Buying when the market is hot? Only if your financial situation is also in a sweet spot. Myth busted!
You Have Put 20% Down Payment
The favorite mortgage rate for buying a home is usually 20% of the property value down with a 30-year fixed rate mortgage. Not only could the mortgage length hurt you if you’re only planning on staying in the home for 15 or so years, but many lenders will work with you on how much you have to put down on a home to get a mortgage. There are options for first time home buyers from the government that let homeowners put as little as 3.5% or zero down at the time of closing.
For more information on home warranties, take a look at Landmark’s main page at www.LandmarkHW.com. If you choose to buy a home, save money on the inevitable home maintenance that comes with it by purchasing a home warranty.