Should I Rent or Should I Buy???!!

This is the age-old question, and it’s a big one! In my profession, I naturally speak with many people about this very question, and quite frankly there is never a straightforward answer! I have advised and helped clients to buy a home, but I have also advised clients NOT to buy a home too.

Deciding between buying and renting a home is a decision that ultimately depends on personal circumstances, financial goals, and lifestyle preferences. This blog is designed to explore the benefits of each option, and to help guide you towards an informed decision, should you be contemplating this very question.

The Benefits of Buying a Home

• Equity & Appreciation
  Perhaps the most obvious advantage of buying a home is the opportunity to build equity over time. As you make mortgage payments, you gradually increase your ownership stake in the property. Over the years, this can lead to long-term financial stability and security. So much so, that 83% of personal wealth comes from Home Equity at retirement.
  Additionally, property values tend to increase. This market appreciation allows you to generate even greater wealth through home ownership. Property values have increased in 73 of the last 81 years, which shows buying a home is potentially a very solid investment.
• Personalization & Stability
  We all know the saying “There’s no place like home” and there’s a reason why. Owning a home provides you with the freedom to personalize and customize your living space according to your preferences. Whether it’s painting the walls, remodeling the kitchen, or creating a beautiful garden, homeownership allows you to make your house a true reflection of your personality.
  Moreover, owning a home often brings a sense of stability and belonging, as you establish roots in a community and have the potential for long-term residency.
• Tax Advantages & Savings Benefits
  Renters typically look at their monthly rent v a monthly mortgage on a property and initially see a lower monthly outlay for renting. On the surface this may typically be true, but when yu take a deeper look, there are benefits to buying.
  Homeownership comes with potential tax advantages, such as deducting mortgage interest and property taxes from your taxable income. These deductions can help lower your overall tax burden.
  Additionally, the act of paying a mortgage can be seen as a form of forced savings, gradually increasing your net worth, as we already discussed.
  Lastly, your mortgage does not change. With rising rental costs, a stable mortgage payment could allow you to enjoy more affordable living in the long run.

The Benefits of Renting

• Flexibility
  Renting typically offers a level of flexibility that is unmatched by homeownership. If your circumstances change, such as a job relocation or a desire to explore a new neighborhood or city, renting allows you to easily pack up and move. This flexibility can be particularly advantageous for individuals who value variety or have uncertain future plans.
  (With resources such as AirBnB, owning a home does now allow for flexibility to some extent too. This can even create a revenue stream to fund a more flexible lifestyle.)
• Lower Upfront Costs
  One of the immediate benefits of renting is the lower upfront costs compared to buying a home. There is no need for a substantial down payment or the associated expenses of homeownership, such as property taxes, maintenance, and insurance. By renting, you can potentially invest the money you save elsewhere, such as in stocks, education, or other financial goals. This financial flexibility can be especially beneficial for those who prefer to diversify their investments or have shorter-term financial plans.
• Less Responsibility for Maintenance
  One of the significant advantages of renting is the reduced responsibility for maintenance and repairs. When you rent a home, the landlord or property management company is typically responsible for major repairs and upkeep. This can save you both time and money, as you won’t have to worry about unexpected expenses or the hassle of managing repairs on your own.

Making a Decision

The right decision is ultimately dependent on your personal circumstances. When considering the above benefits of buying or renting, apply these to yourself, and evaluate against your …

1. Financial Considerations
   When deciding whether to buy or rent a home, it is crucial to assess your financial situation. Consider factors such as your income, savings, and debt. Reflect on your long-term financial goals and stability. Additionally, take into account prevailing interest rates and market conditions, as they can impact the affordability of homeownership.
2. Lifestyle and Future Plans
   Your desired lifestyle and future plans play a significant role in the housing decision. Evaluate factors such as job security, family plans, and personal preferences. If you value flexibility, frequent travel, or the ability to explore different living environments, renting may be a better fit. On the other hand, if you seek stability, personalization, and a sense of ownership, buying.

Hopefully this will help guide you to an informed decision that is right for you. However, if you would like to discuss this question further, and need help to evaluate what is best for you, I would be happy to offer a honest and free consultation.

What is Buyer’s Remorse and how does a good agent help to avoid it?

As the housing market has started to settle, after a wild 2 years, we are now seeing an understanding of what happened, and some reality checks.

There has been recent discussion about “Buyer’s Remorse” and this was even covered on King5 News. A recent survey found nearly 75% of buyers during the pandemic now have some “remorse” over their home purchase. This data is somewhat concerning and could be especially worrying for those considering buying a home in the near future. If this is you, please do not be too alarmed! The past 2 years were unprecedented, and it is important to remember that this was far from a normal market. It is also critical to understand that a good agent can help you avoid this, no matter the market!!

So what happened?

Buyers had it tough during the past 2 years. With extremely low interest rates, and extremely low inventory, the market was the most competitive it had ever been, driving prices to increase dramatically. We saw some buyers desperately bidding way way over ask price to secure a home. We saw buyers waive all contingencies to appeal to sellers. We even saw buyers broaden their search to much further away to increase their options. We even saw buyers ‘settling’ for houses that did not fully meet their needs or wants, due to the challenging and competitive nature of the market.

ALL of the above are things that a good agent would typically advise against!! As a result, there has been some fall-out for some buyers. The cooling of the market saw housing prices drop, leaving some buyers in a negative position on their home. Some buyers have found problems with their new home which would have been easily discovered with an inspection, had they not waived the contingency. And some buyers are now also facing difficult and long commutes, with employers now requiring staff to return to offices now the pandemic has ebbed.

So how would a good agent protect against this?

What we saw was unprecedented, and no one was able to forecast the market and the challenges faced. Agents and buyers had to face and overcome the challenges of the time, reacting to the constant changes.

However, even through the height of the market, I was able to successfully guide my clients into purchasing the right properties at the right deal, protect their interests, and avoid any future regrets.

I was able to achieve this, by following these key principles at all times:

Understanding my client:
Knowing their needs, desires, restrictions, what & who is important to them, what they like to do, and their favorite places to go. Knowing their commitments and passions. Knowing their goals and their future dreams. Understanding the way they view things, understanding what would make them happy, and importantly, understanding what wouldn’t. This level of connection, knowledge and understanding of the client, enables me to have their best interests and needs, at the center of the property search at all times. It also enables me to know whether a property is the right fit for them.

Having Detailed Knowledge of the Market:
Having sound knowledge of the market conditions, comparable properties, trends, and any upcoming changes that could have an effect. Knowing both the market worth of the property, and the worth of the property to my client. This is essential to identify whether a property is viable for my client and what needs to be done to make a successful deal.

Being a Confident and Strong Negotiator:
Even in a strong sellers’ market, with buyers having less leverage, it is never a case of simply giving the seller whatever they want … It is ALWAYS important that the deal is right for my buyer! Identifying where we could negotiate to benefit my buyer is essential. Even in the height of the market, I was still able to close on a home off-market, draw sellers into accepting offers before review and avoid bidding wars, and have sellers accept lower offers. Being prepared, being armed with detailed knowledge, and focused on my clients’ interests are just a few of the essential elements needed to successfully negotiate on their behalf.

Maintaining Focus:
No matter what path the property search takes, no matter how long or short the process is, a vital role of the agent is to ensure that the clients stay focused, even if it means the search takes longer. It is often all to easy to have wandering eyes, looking at properties outside of their needs and wants, looking at areas that do not meet their commitments and goals. This discipline ensures that the clients are looking at the right properties and are not being lured down a path to regret.

Advising Expertly and Honestly:
Ultimately, the client is the one who makes any decision. This is why it is imperative that the agent has guided them and advised them correctly. This also means that there must be complete honesty as well expert knowledge. This means knowing the right limits, the right direction to steer your client, and being prepared to draw the line. A good agent knows how to buy a home, a great agent knows when to walk away.

If you are planning to enter the housing market, make sure you are working with a GREAT agent … one that will always protect your interests.