Should you rent or buy your next home?
When I started my real estate career way back in late ’80’s it was accepted wisdom that you are only a renter until you can scratch your way into owning.
The question was not, “should you buy” it was “when will you buy?”
It wasn’t easy to buy a home back then. Interest rates were double digits, high unemployment rates were a very fresh memory and the collapse of the junk bond market and the savings and loan crisis were our corporate finance debacles of the day.
But even against that uncertain backdrop, the dream of homeownership was as strong as it was in the 1950’s.
Times have changed
You probably expect me to tell you that real estate is the greatest wealth building vehicle in America and all manner of personal sacrifice is worthy in order to call oneself a “Homeowner” (cue Tabernacle Choir and Heavenly Light). You might think I never consider the buy or rent question.
And, from a purely financial perspective, it makes all the sense in the world to buy. I would argue, however, that for most people a home is a lot more than a financial decision.
The hard truth is that many can not afford the houses that match all the important priorities in life. For example, if your priority is being close to family, and your family lives in an affluent area, should you live in a remote area just to afford a home? What if your priority is spending time with your kids, but the only areas you can afford are an hour commute to your work?
Other people need, want, and desire the convenience and mobility of a rental. They choose to rent as a lifestyle and use other financial tools as a means of building wealth.
Buying a home is still a great idea for many
Buying a home means you get to participate in the only significant tax break available to most Americans, even after the recent tax reforms. Homeownership is still the most common vehicle for wealth creation. Rent or buy, you still have to pay for where you live.
When you are a renter, the landlord controls your payments, the condition of your dwelling and, even, your right to stay in the home. As a homeowner, you have far more control over your environment.
Lastly, owning a home encourages a sense of connectedness to a community and, in turn, a strong community creates higher home values.
What should YOU do?
In order to decide if you should rent or buy your next home, consider the following questions.
- What are your priorities for your lifestyle and location?
- Can you afford a home that suits your priorities?
- How important is wealth building to you?
- Can you build that wealth outside of home ownership?
- How important is a sense of permanence and control to you?
- How important is flexibility and convenience to you?
The answers to these questions should help you make your decision. The one thing I implore… do not buy because some idiots say you are “lessor than” if you do not own your home.
It is a fantastic time to buy.
After many years of decreasing inventory of Glendale CA homes for sale, things are starting to improve. It is still a competitive market for the very best homes, but there are opportunities we just didn’t see in the recent past. For example, the number of cash buyers bidding outrageously high prices seems to be declining. Also, the number of homes with price reductions is on the way up.
We predict more homes on the market for buyers to choose from. Maybe one of them should be yours.
Here are some resources to help you buy a Glendale CA home.
Rent vs Buy Calculator – here’s a nifty calculator from Nerdwallet to help you refine your numbers
Buy with DIGGS – Find out why DIGGS might be your best Glendale CA agent choice.
Find the Best Glendale Ca Neighborhood
Home Buying 101 – Your basic steps to buying a home