Should You Buy or Rent Your Next Home?
Manhattan presents a singular set of problems in the buy-or-rent question, with all the financials on either side being in a unique bubble all their own.
In most of the surrounding boroughs, though, the question is much the same as anywhere else in the country. One thing New Yorkers have in common with others is the basic tendency in human nature to put off difficult decisions.
The question of whether you should buy or rent your next home is all too often subject to that tendency. Many people don't like to "waste" money on renting, but are hesitant to commit to purchasing a home.
With those opposing forces pulling at them, it just seems too hard to decide. The question is not so complex, though, if you approach it with a plan. There are a number of important factors that you can consider in deciding whether you will be better off buying your next home, or if continuing to rent is the best option for you.
There are positives and negatives associated with both buying and renting. It is important to consider the relative advantages and disadvantages of both buying and renting, as well as taking a look at your own particular situation.
The advantages of buying over renting include:
* Even in an uncertain market, real estate is a good investment in the long term.
* Homes generally increase in value as long as they are maintained properly.
* When you send in your mortgage payment each month, the money actually goes toward paying off your loan, moving you closer to owning your home free and clear.
* The monthly mortgage payments that you make towards your fixed-rate loan remain the same for many years.
* Depending on interest rates in the current market, mortgage payments can actually be less expensive than rent payments.
* There are fewer restrictions on what you can and cannot do when you live in your own home.
* Home ownership provides an inherent satisfaction.
The advantages of renting instead of buying include:
* Any repairs and maintenance are provided by the landlord.
* Your commitment to the property is limited based on the terms of your lease, which may be as little as one month and is sometimes as long as one year.
* Depending on the type of property you rent, you may have access to a variety of amenities, such as laundry facilities, swimming pools, tennis courts, and more.
* It is easier to get approved for a lease than for a mortgage.
Factors to Consider When Deciding whether to Buy or Rent
* Is it just you by yourself or do you have a spouse and children?
* What can you afford as far as rent and mortgage payments go?
* Do you have the adequate money for the down payment?
* Can you handle taking care of the maintenance and upkeep on your home, both in terms of the expense and the time commitment?
* Are you able to pay for mortgage insurance and homeowners insurance in addition to the amount of your mortgage payment?
* Are you planning to move again soon, or will you be staying in the same are for a while?
* Is your credit history healthy enough for you to be able to qualify for a home loan?
Here are some resources as well to help you decide whether to rent or buy. They are:
* HUD
* Homefair
* National Association of Realtors
* New Buyer
* Biz Rate
There are many factors to consider when determining which option is best for you. When you are ready to seriously look into buying a home, you should talk with a reputable mortgage lender to verify the amount of mortgage for which you are likely to qualify, and then start looking for the home of your dreams.
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Five Insights on Hiring a New York Realtor
Regardless of whether you are in the New York real estate market to buy or to sell, finding a Realtor is an important first step in the process.
Having the right person as your personal representative makes it easier to find that right place to live or bringing potential buyers to the table.
In either case it's that vital process of preparing, finding and choosing that defines the success of the transaction, especially in a market like New York where the smallest nuances of neighborhood and situation can make such big differences in value -- as the old saying goes, "You gotta know the territory!" Some people may find that they are lost when it comes to finding a good Realtor to help them with buying or selling.
Here are a few traps to watch out for when looking for the right Realtor.
Picking the First Realtor You See
Don't just select the first person you meet. Just jumping in with your initial reaction may be OK for a school quiz, but without some honest effort on your part that first impression can fade like a bloom. Some people are so anxious to buy or sell a home that they find the name of somebody in the business and then go with that agent without reviewing options. This is a mistake.
Ask Questions
The final mistake that Realtor shoppers should avoid is hesitating to ask candidates a lot of questions. Some people worry they are being a bother and do not want to bombard the Realtor candidates with a lot of questions regarding fees, procedures, and other aspects of the proposed professional relationship.
After starting with the good recommendation or whatever brought you to the agent to begin with, asking questions is the only way to really know if this Realtor is the best choice for your needs.
Thinking That Only Big Realty Chains Have Really Good Realtors
Some who are looking for an agent may believe that only the large, well-known realty firms will have all of the good Realtors. Although they may have some excellent staff on board, evaluate smaller local real estate concerns as well as large ones in your search.
Both in New York City and out in the suburbs, firms of all sizes have excellent people working for them, and the wide availability of tools and analytical resources has largely taken away the once-exclusive advantage of the giant firms.
Being Hesitant to Ask What Compensation the Realtor Will Receive
In selecting a Realtor, it is important to ask about what they will receive for the work. A seller's agent will charge a set percentage of the final sale price as the fee for services.
The fee is usually negotiable, and it is important to ensure that the fee is not too much, and the time to address this is early.
A fee that is well below what others are asking can be trouble as well; an offer to sell your home for low fee will likely leave you short when it comes to getting everything done. A buyer's agent, incidentally, is paid from the commission amount set by the seller.
For this reason, if you are a buyer, there is no extra cost for having an agent represent you.
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