Rent vs Buy for College Students or Recent Grads

Rent vs Buy for College Students or Recent Grads

SHOULD A COLLEGE STUDENT OR RECENT GRAD BUY A HOUSE?

Getting a student ready for college or the real world after graduation can be quite stressful. Housing is always a major factor to consider. Should they buy or rent? We know that coming back home to live with parents is not what anyone wants!  There are many factors to consider and there isn’t a simple black or white answer that fits for everyone. There are too many variables for that. It’s best to make a list of Pros and Cons and weigh out the balance for you to decide. Here are some facts about both Buying and Renting to help!

The Benefits Of Renting

  1. Renting doesn’t need much equity, since all you have to do is identify an apartment that suits your needs, contact the agent and move in once you’ve paid your deposit and signed the papers. This is cost-effective, especially if you’re in college and don’t have access to large amounts of money.
  2. Renting also gives you the peace of mind in knowing that should anything happen to your apartment, you’ll have the freedom to up and leave. If you buy a house and have it destroyed due to a hurricane or fire, you may have to start from scratch, something that’s not so easy if you’re young and in college.
  3. Renting saves you a lot of money in the form of maintenance and repairs. This is because it’s the landlord’s responsibility to fix that broken pipe or make sure that the grass is cut every so often. If you decide to buy a house, the amount you will spend maintaining your property will add up over the years. This could’ve been money you could’ve used for other types of investments or put down as part of your retirement fund.
  4. Renting may also help if you don’t want to be tied down at a particular location for extended periods of time. If, for instance, you have a 1-year lease and decide to move to Costa Rica once it expires, nobody can stop you. Buying a house will mean that you won’t have this kind of flexibility since you’ll be stuck in one place, forced to keep making payments as well as take care of the house for extended periods of time.

Now lets look at buying

The Benefits of Buying a House

  1. Buying would make more sense in case you’re looking to start a family. You’ll have the stability that comes with knowing that you own your home as well as a sense of community especially if you buy in a family-orientated estate or county.
  2. Buying a home will eventually free you from making mortgage payments. This basically means that you’ll be home free after a certain amount of time has elapsed compared to renting which will have you making checks out to your landlord for an indefinite amount of time.
  3. Owning a house is a good idea if you want to have more autonomy and control when it comes to home improvement projects. You’ll be free to decorate whichever way you see fit, and you can make as many changes as you’d like. In fact, the value of your home will increase over the years provided your home improvement projects are done well and add more quality and comfort to its occupants.
  4. You can also rent to roommates that live with you, which could offset some or all of the mortgage and other expenses. Some of the millionaires we’ve interviewed followed this strategy to get a leg up in college.
  5. Even if you decide not to stay in your home for long periods of time, you can still make money off it to help pay for the mortgage. For instance, if you don’t want to be tied down to a home and want to travel for a couple of years first, you can opt to rent it out at a price that’s slightly higher than your mortgage amount. This way, you’ll have an income stream as well as be able to pay off your mortgage in a convenient way.
  6. Buying will also give you access to tax credits which can offset the cost of buying your home. All you have to do is make sure to itemize property-related expenses when filling in your tax return.
  7. Buying a house gives you security that renting can’t provide. Should your income remain the same over a long period of time, you can automate your mortgage payments, giving you stability and the confidence in knowing that you’ve got accommodation sorted for the better part of the future.

Here at Metro First Realty, we hope that these facts have been helpful. Please reach out to us if you still need help making plans for your student or grad.

Is it best to buy a home after school starts? Click here to find out!

 

Buy A Home After School Starts

3 Reasons To Buy A Home After School Starts

Should you wait until school starts to buy a new house?!

It’s been said time and time again that the best time to put a house up for sale is around early spring. While that may be true for sellers, it’s the exact opposite for buyers! Here are some quick points to consider when looking to buy this fall.

1. Time On The Market

One issue that works against sellers (but favors buyers) is the length of time a home has been on the market. The longer a home sits unsold, the more bargaining power a buyer has, Smoke says. Also, inventory tends to increase from summer to fall because homes aren’t selling as quickly. Active listings on Realtor.com remained for a median of 65 days in May and June. But in August, that number was projected to increase to 72 days. That shouldn’t dissuade potential buyers from considering a home, Smoke says.

“If the home and location seem to fit, don’t cross it off your list just because of the time of the year or the time on market,” Smoke says. “There will always be sellers who need to put their home on the market.” Also, the services related to buying — moving, buying furniture, signing up for cable — tend to be discounted toward the end of the year and during winter, Smoke notes.

2. Less Competition

Once school starts, there are fewer buyers to compete with on your offer. Most families prefer to move before their darlings head back to school. Also, cooler weather drives down demand. In fact, from now until February, buyers have more leverage than during the rest of the year because there’s still a large amount of inventory relative to the time of year, says Jonathan Smoke, Realtor.com’s chief economist.

In 2015, sales of existing single-family homes nationwide declined 3.7%, from 4.86 million in July to 4.68 million in October, according to the National Association of Realtors. Granted, if you live in a market with a tight inventory and brisk sales (such as San Francisco and Seattle), you still might face stiff competition. But in markets like Indianapolis or St. Louis, you’ll see a lot less gladiator-style jostling and more chances to negotiate with sellers when you buy a home.

3. Prices Match Market Value

If homes listed during the busy summer months didn’t sell, chances are that they were overpriced. That means homebuyers will see prices fall more in line with market value, says Mark Goldman, a real estate instructor at San Diego State University and a loan officer with C2 Financial Corp.

For example, in 2015, the U.S. median sale price dropped 5.5%, from $233,400 in July to $220,600 in October, according to NAR.

Working with a real estate agent who can assess asking prices can help you avoid overpaying, Goldman says. If you want to buy a home that’s priced higher than what your agent estimates to be appropriate, submit an offer that’s in line with market value and with comparable sales data attached to back it up.

If you are looking to buy a house this late summer/fall, please reach out to one of our agents or contact us by calling or the website. We look forward to helping you find your new home!

Do you know how much your home is worth? Read up here!