To Rent or To Buy?

Life Factors

According to Listen Money Matters, if you plan to live in the area for less than two years and want to maintain flexibility and mobility in where you live, then renting is a better option for you than buying. Conversely, if you plan to live here for more than two years and want the feeling of stability that comes with homeownership, then buying may be the right direction to go for you.

If you are single, renting may be a better option for you, as a mortgage payment may be difficult to make with one income versus two. You can always have roommates in both renting and homeownership, but if you choose to have roommates as a homeowner that pay you rent, you become a landlord too, and that’s a whole different scenario with additional liabilities and potential issues to consider.

If you’re married or in a long-term relationship choosing to rent or buy becomes influenced by additional factors such as your ages, total household income, financial situation, personal preferences and whether you have children.

If you have children, both buying and renting have their pros and cons. If you want to ensure your kids will remain in the same school district throughout their education and want them to form the bonds that come with permanent neighbors associated with homeownership, then buying may be a better option than renting, as your neighbors are likely to change often with renting. If you move frequently, even within the same city, its very possible that your children’s schools and potentially even the school district may change.

Financial Situation

The Balance and NerdWallet both provide great insight on the financial side of buying a home versus renting. Both mention that if you have a lot of debt, bad credit and little savings, you’ll need to continue renting for a while. Don’t be discouraged! There are lots of steps that you can take to start paying down your debt, rebuilding your credit and start saving if you do dream of becoming a homeowner. One easy first step - pay your rent on time every month as this will help improve your credit score!

Look at the tools on our Miller Family Homes website under the Financial & Mortgage Tools page to learn more about the steps you can take to get your finances in order and start your pathway to homeownership. Scheduling a meeting with one of our Recommended Lenders is a great first step! Most of them can let you know what you need to do to fix your credit and pay down your debt. Even if you’re not ready to buy right now, they can help you get on the right track if you’re considering buying in the future. Its never to early to start planning if you want to buy a home.

If you have financial stability, a good amount of savings and little to no debt, then you’re more than likely ready to start your pathway to homeownership! When you’re ready, you can start exploring our new home website to look at available homes, calculate potential mortgage payments, see which lenders we recommend and learn more about building your dream home, if that’s something you’re interested in.

As a tenant of Miller Family Properties, if you do choose to buy or build with Miller Family Homes, you’ll have the opportunity to rent up until a week after your closing and can break your lease anytime up until then so that you have a place to live while your home is being finished and don’t have to worry about paying a fee for breaking your lease when that time comes. Even better, your new home will be sparkly clean and ready for you to move into…Translation, you won’t have to clean two residences! Just your current unit as you move out to help get your security deposit back.

Current Job & Career Goals

Job security is a big part of homeownership and lenders will most likely look at your current employment status and past job history before they’ll give you a preapproval for a mortgage. Its important that if you want to purchase a home, you have a job and keep a job.

If you’re don’t work outside the home, your spouse’s current and past employment will be the determinate on getting preapproved. But if you have a side-gig such as freelancing, photography or making and selling things on Etsy, tutoring, babysitting, anything that you do that provides you with money to live on, then that counts as income and should be mentioned when it comes time to meet with a lender. Essentially, they want to see that you’ll have the ability to pay the mortgage that they will approve you for. Take a look at our Financial and Mortgage Tools to learn more about the mortgage process, what affects mortgage rates and what you'll need to take to the lender meeting.

If you’re certain you’ll stay at your current job and even have the potential for advancement in your career and more pay, then buying a home is a good option. Not only are you less likely to move (unless you work for a company that moves its employees frequently, but they often cover moving expenses and help sell your home in that instance), but you also have the stability necessary for making a mortgage payment, paying off current debt and building savings.

Personal Preferences

If you want flexibility, plan to move frequently and don’t want to be responsible for repairs or maintenance (other than daily cleaning), then renting is the way to go for you and your family. You’ll have less freedom as far as painting the walls, hanging things on the walls, and structural and design details of your home are concerned. You’ll be locked into set paint colors, cabinets, counters, etc. and often are limited to what can hang on the walls unless you plan to do extensive repairs when you move out. You’re also liable for repairing anything that gets damaged while you live in a rental. And you may be subject to yearly rent increases.

Conversely, if you want stability, don’t plan to move in the next few years, want to be able to make updates to your home such as the paint colors and design and structural details and have overall financial security, then buying is the way to go for you and your family. Yes, you’ll be responsible for everything that goes wrong with your home, but you’ll start building equity and more-likely-than-not see a great return on your investment if or when you decide to sell your home. Most likely your mortgage payment will fluctuate minimally compared to rent rate increases. Plus, you’ll be afforded new opportunities like the option to keep your house and rent it out yourself when you're ready to buy a different, newer home. Not to mention you'll eventually pay your home off which means more money in your bank account every month.

The Most Important Thing to Consider

There is so much to consider when it comes to renting versus buying. The most important thing to keep in mind is that regardless of where you are or where you want to be, when it comes to your “home” – the place where you live, the place you come back to every night, the place you eat dinner with your family or roommates, the place where you make memories with friends and family, the place where you relax, the place that is your sanctuary from this crazy world - you can count on one thing, the age-old saying “home is where the heart is” holds true. You can make any residence a home!

Further Reading & Helpful Tools

NerdWallet | Rent vs. Buy – What’s Right For You features a Rent vs. Buy Calculator to help you financially determine which is the best option. The article below the calculator is a great read loaded with information.

MortgageCalculator.org | Rent or Buy Calculator is another calculator similar to NerdWallet’s. This page features many other details with current mortgage rates and other call-outs with the pros and cons of both renting and homeownership.

Listen Money Matters | Featuring an article and podcast on Rent vs Buy? Figure Out What Option Is Best For You can help provide additional details about the mortgage process and financial considerations. It’s a great listen while you’re driving to work or on your lunch break. Plus, they offer other great podcasts to help you get you financially secure.

The Balance | Another great financial and budgeting reference similar to NerdWallet, they have a great article about 5 Reasons Not to Buy a House and 5 Reasons You Should that could easily help sway your decision with practical, solid advice.

Miller Family Homes | Whether your ready to buy, still considering or just want to become more financially stable, our Financial & Mortgage Tools can help you get a great snapshot of your current financial picture, information about the mortgage process and put you in contact with four, vetted lenders that can provide sound financial advice and planning.