Considerations for Renting vs. Owning a Home
April 12, 2024
Not sure if you want to commit to an FHA loan to buy your own home? There are important choices to make when deciding whether to rent or own, but making the most informed choice is crucial. Some don’t think about the advantage of a fixed mortgage payment over rent that potentially increases year to year.
And that’s just one of the options to consider when deciding whether to continue renting or jump to home ownership.
Renting Considerations
The potential for rent increases is only one issue. What happens when the landlord changes the terms of your lease agreement for the new rental contract?
They may be paying a utility bill or two (landlord-paid water and trash are just two options some offer), but what happens if that changes? That’s a random factor to be mindful of when weighing your options. If the contract is rewritten, today’s bargain may turn into tomorrow’s expenses.
Another factor to consider is that in big cities, some rental units are converted into condominiums. Existing renters may be offered the option to buy in, but even with that consideration, such a move can take some renters by surprise.
I have one important note to add here: Did you know you can use an FHA condo loan to purchase a condo unit in such cases, depending on the circumstances?
And then there’s the parking issue. In small towns, renters may not have problems finding a convenient spot, but in California, New York, parts of Illinois, and elsewhere, the parking issue is much more important. Changes in zoning, parking regulations, or even new construction may affect where renters can park.
Owning Considerations
Owning a home means more security and stability for buyers worried about the issues above. But purchasing isn’t without its own concerns.
You’ll want to know the property taxes levied in the area and their history. In Chicago, for example, property taxes seem to be on an ever-upward trajectory for various reasons. But these issues change only a few hours south in mid- to central Illinois.
Another issue to think about? How do you feel about joining a homeowner’s association and paying the associated dues?
Not all HOAs are the same, so if you had a good (or bad) experience with one, it helps to research the specific HOA you might have to join if you buy a particular home.
Buying a home also means getting used to NOT having a landlord or a lease. You are the person responsible for getting repairs done in the living space, including HVAC, plumbing, and electrical.
There’s no landlord to call, and that is a two-way street. You don’t get to rely on the landlord to get the work done, but you don’t have to submit to the landlord’s schedule for those repairs.
------------------------------
RELATED VIDEOS:
Annual Income Requirements for FHA Loans
Good Credit History Helps Get FHA Loans
Stay Informed About Your Mortgage Closing Costs
And that’s just one of the options to consider when deciding whether to continue renting or jump to home ownership.
Renting Considerations
The potential for rent increases is only one issue. What happens when the landlord changes the terms of your lease agreement for the new rental contract?
They may be paying a utility bill or two (landlord-paid water and trash are just two options some offer), but what happens if that changes? That’s a random factor to be mindful of when weighing your options. If the contract is rewritten, today’s bargain may turn into tomorrow’s expenses.
Another factor to consider is that in big cities, some rental units are converted into condominiums. Existing renters may be offered the option to buy in, but even with that consideration, such a move can take some renters by surprise.
I have one important note to add here: Did you know you can use an FHA condo loan to purchase a condo unit in such cases, depending on the circumstances?
And then there’s the parking issue. In small towns, renters may not have problems finding a convenient spot, but in California, New York, parts of Illinois, and elsewhere, the parking issue is much more important. Changes in zoning, parking regulations, or even new construction may affect where renters can park.
Owning Considerations
Owning a home means more security and stability for buyers worried about the issues above. But purchasing isn’t without its own concerns.
You’ll want to know the property taxes levied in the area and their history. In Chicago, for example, property taxes seem to be on an ever-upward trajectory for various reasons. But these issues change only a few hours south in mid- to central Illinois.
Another issue to think about? How do you feel about joining a homeowner’s association and paying the associated dues?
Not all HOAs are the same, so if you had a good (or bad) experience with one, it helps to research the specific HOA you might have to join if you buy a particular home.
Buying a home also means getting used to NOT having a landlord or a lease. You are the person responsible for getting repairs done in the living space, including HVAC, plumbing, and electrical.
There’s no landlord to call, and that is a two-way street. You don’t get to rely on the landlord to get the work done, but you don’t have to submit to the landlord’s schedule for those repairs.
------------------------------
RELATED VIDEOS:
Annual Income Requirements for FHA Loans
Good Credit History Helps Get FHA Loans
Stay Informed About Your Mortgage Closing Costs
Do you know what's on your credit report?
Learn what your score means.
