BEHIND THE SCENE
At Team Athey & Remarkable Property Management, we know buying a home is one of the biggest decisions most people will make in their life. And we’ll be honest with you—not everyone is ready to take on the financial or emotional responsibility of home ownership. For some, especially those that cherish their freedom and flexibility, buying may never be a great option. So how do you decide? For starters, ask yourself the six simple questions below.
If you’re like most of us, you’ve had the pride of home ownership instilled in you. You’ve had it beaten into your psyche that buying a home is the ultimate achievement. You’ve also probably heard things like “renting is throwing money away” and “you need to build equity by buying a house”. Yes, for some people these statements may be true. But not for all, especially those who need freedom and flexibility, or those whose future is in a state of flux.
Ask yourself the six questions below, and be completely honest with yourself. Because renting vs. buying is not necessarily a bad thing. In fact, depending on your circumstances, renting may be more fiscally responsible. Are you ready? Let’s get started.
QUESTION 1: Can you afford to buy a home?
Hint: You’ll need at least a 3.5% down payments, plus around 3% of the home’s purchase price for closing costs. Putting 20% down on a house is better because you won’t have to pay mortgage insurance which can add up over the years. But don’t stop at down payments and closing costs, consider that you should have three to six month's worth of emergency savings. Because home ownership comes with hidden costs. If something breaks, or you have damage that insurance doesn’t cover, you’re responsible for it. You should also factor in the cost of monthly lawn care, pool maintenance and HOA dues. Don’t move into a house only to find out you can’t really afford it. Do the numbers up front so you don’t end up house poor.
QUESTION 2: Where are you going to be in five years?
Hint: Let’s assume you are in great financial shape, but you’re uncertain if you are going to be relocated for your job. Or, perhaps you are going to retire soon, but not quite sure of where you want to spend your retirement. Note: You should only buy a home if you’ll be in it for at least five years so you can recoup the costs of buying and selling. Which means, if you aren’t sure you will, then you should consider renting. Not only does renting give you flexibility, it is also potentially less expensive in the short-term.
QUESTION 3: Are you prepared for the time investment of home ownership?
Hint: Do you like making minor (or major) repairs, painting and landscaping? Because that is a big part of having a house of your own. This is not necessarily a bad thing if it is your thing . . . some people just love repairs and renovations. In fact, multiple cable shows are devoted to this topic. But if you like hassle-free downtime and weekends filled with leisure activities, stop and think about this one. Texting a landlord with maintenance requests is really very easy.
QUESTION 4: Are you going to get married? Have children?
Hint: You don’t need to have a partner to buy a home. But
if you think you might be getting one in the near future, perhaps it might be best to wait and hear their opinions of what kind of home or neighborhood theylike. Topics of discussion between the two of you should include, what kind of architecture do we want? Will we have children? What payment is comfortable for us? You get the picture. Of course if you buy a home now and your new spouse doesn’t like it, you can always sell. But remember the note in Question 2— Note: You should only buy a home if you’ll be in it for at least five years so you can recoup the costs of buying and selling. (There we put it in again for your reading convenience. And because it bears repeating because it is so important.)
QUESTION 5: Do you want to buy a home as an investment?
Hint: If you’re on sound footing financially, this might be a good decision. Or it might not. Because the housing market can go up and down, you may not recoup your investment and actually lose money . . . or you may make a killing. Again it depends on location, timing and supply vs. demand. Always do your homework and make certain exactly what you are buying. Will the neighborhood decline or go up in value? Is a major employer in the area stable? Will new construction drive down the cost of existing homes? You know, that kind of homework.
QUESTION 6: Do you really, really, really want a place of your own?
Hint: If you are financially sound, and your status quo is somewhat stable, and you just really want a place of your very own, then we say go for it. Your emotional need to nest should be recognized as an important reason for buying a home. Perhaps you desire the sense of stability that having your own place brings. Or maybe you simply want to bring your own touch to the interior or exterior. In short, if your heart is saying “yes” to buying a home, and your brain is a little on the fence, then maybe it is time to talk to a realtor. Go out and look for your dream house. After all, if you don’t find it now, you can always rent. And that can be a good thing too.
I’m Suzanne Athey, the founder of Team Athey & Remarkable Property Management. If you’d like to know more, call me at 469-916-1222 or email me at suzanne@teamathey.com. I’d love to visit with you and answer all your questions.
