Real Estate Weekly - Home » Renting and Buying Advice
Renting and buying both have pros and cons. After considering the positives and negatives of both options, you should choose the one that is right for you.
Why Rent?
Renting gives you flexibility and requires little commitment. If you are unhappy with your neighbors or dislike the traffic pattern, smells, or sounds of a place, you can move. If you need to leave for a less or more expensive place due to a change in income, you can do that, too. Another benefit is that you are not responsible for property management and maintenance; instead, your landlord is responsible.
When you rent an apartment or a home, you will be asked to pay a month's rent in advance plus a deposit. The deposit amount varies; it can be as much as one month's rent. The deposit may be refundable, meaning that you will receive that money when you move if you meet certain conditions. You will also need to have proof of income (tax return or statements) or employment (acceptance letter or employee identification). Depending on your age or earnings, you may also need a family member to co-sign your lease agreement.
When you are a prospective renter, remember the fundamentals: safe, clean, and pleasing.
- Safe: You should feel safe where you live. Has the landlord taken reasonable steps to prevent crime? Are there appropriate locks and lighting? Does the layout of the property prevent crime? Is every aspect of the property in ordinance with building and safety codes?
- Clean: A clean property indicates the degree of care that the landlord places on the property. You should see no broken windows, doors, walls, locks, or lights. The pathways should be clear and clean. Wear and tear on sidewalks, walls, or gates should be minimal. You may also want to speak with other tenants or neighbors to see if there are any complaints regarding the landlord.
- Pleasing: You are going to live in the apartment or home for at least several months. If some aspect of its aesthetics is not pleasing, remove the property from your prospect list. The property might be safe and clean, but its design might be so flawed that living there would still be an unpleasant experience.
If a property meets the three fundamentals, you are now ready for the detailed checklist. Discover:
- the rental amount
- the size of the apartment or home
- number of rooms
- condition of kitchen
- condition of bathroom
- what is included in rent (heat? electric?)
- what kind of heat
- what kind of air conditioning
- parking if you own a car (amount)
- appliances included
Why Buy?
If you have already had the rental experience, you may be tired of renting. You may have discovered that it feels as though you are throwing away your money every month when you pay rent. Maybe you are planning to get married and are now looking for a home with your betrothed. Perhaps you want to purchase a home and turn it into an investment property. For example, if you are in the military, you may decide to purchase a house then rent it to other people if the military relocates or deploys you.
Owning a house is an investment. You can deduct the cost of your mortgage loan interest from your federal income taxes and usually from your state income taxes, if applicable. This will save you quite a bit of money every year since most of your monthly house payments consist of interest. In addition, you can also deduct the property taxes you pay as a homeowner. The value of your house may increase over the years, meaning that if you ever decide to sell, you may be able to make a profit. Owning a home also allows you to enjoy something that belongs solely to you, a place where you can express and share your personal style. Of course, this means that you are responsible for the property and maintenance.
When purchasing a house, documentation is required, especially if you have to obtain a loan. First, you will need your social security number. If you are married and your spouse is filing for the loan with you, you will need to bring your spouse's social security number as well. Second, you will need copies of your checking and savings accounts for the past six months. Third, you will need to disclose your other assets, such as stocks and bonds. Fourth, you will need to bring a recent paycheck stub that details your earnings. Fifth, you will need to list all of your credit card accounts and the monthly amount owed on each card. Sixth, you need to bring a list of account numbers and balances due on outstanding loans, such as a car loan. Seventh, you will need copies of your federal income tax return for the past two years. Eighth, you will need to provide the name and address of someone who can verify your employment. Your lender may ask for additional information. Do not hesitate to ask your lender what other documents you will need.
Since purchasing a house is a huge investment, you should consider using a REALTOR. A REALTOR is a member of the NATIONAL ASSOCIATION OF REALTORS, and he or she adheres to a strict code of ethics. This person will help you through the entire process of buying a house, including finding a qualified lender, negotiating an agreement, and closing on the house. A REALTOR will also answer two, important questions: "Will this property provide the environment you want for a home or investment?" and "Will this property have resale value when you are ready to sell?"
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