If you don’t have to rent, don’t. The rental market is insane these days. Landlords, in my opinion are really taking advantage of the extremely high rental prices. It’s actually cheaper to purchase a home. There are absolutely no benefits to renting unless it’s extremely necessary.
If you have less than perfect credit and no savings, renting is probably the way you should go but plan on creating a plan not to rent for longer than 2 years at most. I’ll get back to this. However, if your credit is not a problem and you have some savings, you should be speaking with a Realtor® 100%.
Consider this, if you are looking for a 3 bedroom, 1.5 bath home with over 1200 square feet in Philadelphia, plan on paying no less than $1500 (or more) + utilities. Landlords always want at least 2-3 months rent up front so that’s $3000 (or more) up front and out of your pocket. If you have at least $3000 to just dole out, you are well on your way to purchasing a new home.
There is absolutely no real benefit to paying someone else’s mortgage. If you can afford to pay a mortgage, why shouldn’t it be yours? That’s what it really comes down to. If you are shelling out $1500 a month, why wouldn’t you want to reap all the benefits. After all, someone else’s is sitting in their home reaping all the benefits from your money each and every month.
People tell me they just don’t want the aggravation of owning a home and that’s why they rent but it’s life and no matter what, we are going to have to deal with some type of aggravation. I rented for many years and it was quite aggravating whenever something broke and need of repair. The landlord almost always never wanted to fix the problem and if they did, it was done very inexpensively. Some times it was done not to my liking or in a less than professional manner and took too long to fix. It was extremely aggravating to me.
For those with less than stellar credit, have a plan:
- Find a buyer agent to develop a relationship with
- Write up a plan to repair your credit with your buyer agent
- Know how much it will approximately cost from deposit to down payment and closing costs
- Set a time frame. You don’t want to become a renter for life.
I do this with people. I find that meeting with people who feel they will never be able to buy is motivating to both the person who wants to buy as well as myself. When I see the plan play out and how happy the person is when they finally purchase their new home it’s completely rewarding to both of us.
Some people rent if they don’t know the area. They want to get a feel for different areas before they make that commitment. I respect and understand the reason but I still feel that it’s still best to buy a home. The money you will waste in the rental while you check out different areas will hurt your amount of home you finally purchase between moving costs, first month, last month and security can be upwards of $4500 and that is money lost for your down payment and closing costs. And regardless if you rent first, it’s human nature to always wonder if you purchased in a different neighborhood if things would be better.
Remember, landlords aren’t landlords because they have good hearts, they are landlords because they want other people to pay their mortgages so they can live the good life. Why do you want to pay for someone else’s good life?