There are a number of factors you need to consider to determine whether buying or renting is your best option.
Renting is usually the best option when relocating is a possibility or your housing needs are likely to change in the near future. Also, renting for a while is a good idea if you are unfamiliar with the area or cannot buy the home you want right now.
If none these circumstances apply to you, it would be wise to consider buying your own home.
Real estate is not a liquid asset, which means it cannot be sold and turned into cash quickly. The closing expenses are typically 7 to 8 percent of the sales price, so your home has to appreciate by that much just to recover your investment. That could take two to three years, so if it’s likely that you will need to sell within four years, buying may not be your best option.
You should rent for a period of time if you are unfamiliar with the area and/or not currently able to buy the home you need or want.
There are many factors that need to be considered to make an informed decision about the appropriate home for you and your family. This process takes time – making decisions under pressure or tight time frames often leads to the wrong choice.
The inability to obtain financing is the most common reason prospective buyers cannot buy the home they want. Credit issues and/or lenders’ unwillingness to consider income for qualifying purposes are the primary challenges. Credit issues usually take two to 12 months to resolve. Lenders usually require a two-year history of earnings for self-employed or commissioned borrowers.
If none of the reasons to rent apply to you, then you should strongly consider buying a home. There are two primary benefits: the investment potential and the personal satisfaction that comes from owning your own home.
For most individuals and families, real estate investments are the primary source of wealth creation. Additionally, home ownership provides pride, peace of mind and satisfaction.
Buying in today’s market is particularly attractive because we’ve just come out of a down market and the prospects for increasing property values are very good. The increasing population of La Plata County and minimal housing production over the past five years has already caused rents to skyrocket and property values to increase. Most experts expect this trend to continue.
If you determine that buying a home is in your best interest, I recommend that you meet with an agent specializing in buyer representation who can go over all your options. Time is no longer on your side. Experts are predicting property values and interest rates to rise. This will result in an increasingly higher payment and/or a less desirable home for you and your family as time passes.
Steve Setka is an exclusive buyer’s agent with Keller Williams Realty in Durango and a licensed mortgage originator. He can be reached at 903-7782 or steve@durangore.net.
