Buying vs. Renting

I’ve personally been through the buying and selling process numerous times with my own homes (investment and homestead). I know how intimidating it might seem to go into the buying process instead of taking the quicker and much less time-consuming route of renting. Let me share just a few of my personal thoughts when it comes to buying vs. renting in the Bryan-College Station area.

Regardless of your decision, choosing whether to rent or buy is a MAJOR life decision. Simply put, it doesn’t just come down to how much money you’re having left over at the end of the month. Moreover, it will affect your lifestyle, savings, and much, much more.

Everyday people face the big question of whether they should buy or rent. Some people see it as an investment, a place to put down roots, and a source of tax deductions. Others see home ownership as a responsibility, even maybe a liability with minimal flexibility. Being completely honest, it comes down to YOU and your needs. It isn’t just about money. This comes down to the comfort, lifestyle and vision you have for YOUR life.

This is just a list of my personal pro’s and con’s. Contact me for information regarding your individual situation!

• Renting Pros and Cons
  • PROS: Renting offers predictable monthly income/expenses, flexibility and leaves the repairs to anyone other than yourself.
  • PROS: You can move without penalty when your lease is over
  • CONS: Rent can increase from year-to-year (unless your rental is rent-controlled) or landlords can sell the property, forcing you to leave regardless of how long you had planned to stay
  • CONS: Although repairs and maintenance will be taken care of by the landlord, it might not be as quickly or as well as you would like
• Buying Pros and Cons
  • PROS: Sense of stability, belonging to a community, equity building and investment capabilities (especially in the Bryan-College Station area!)
  • PROS: Mortgages (in some cases) can be cheaper than renting a similar property
  • PROS: Tax deductions. This CAN be a great benefit but can be slightly misleading. It is true that a home mortgage interest deduction reduces your out-of-pocket expenses in your loan term (as long as you are itemizing.) Regardless, this should not be the deciding factor if you should buy a house. For example, for every one dollar spent in interest, you MIGHT save a quarter on your tax bill. BUT as you pay down your mortgage and the proportion of your payment that was going towards interest decreases, so will the tax “break.”
  • PROS: If you get a fixed-rate mortgage, your monthly house payments will never increase (though property taxes and insurance premiums might)
  • CONS: Your expenses and possible repairs can add up. Consider the following expenses you will likely pay as a homeowner that you would avoid paying as a renter (if applicable):
    • Property Taxes
    • Repairs and Maintenance
    • Trash Pickup
    • Water and Sewer Service
    • Pest Control
    • Lawn Care / Tree Trimming
    • Homeowners Insurance
    • Pool Cleaning (if you have one)
  • CONS: One of the biggest “throwaway” expenses CAN be mortgage interest of a long-term mortgage

If you are trying to decide to BUY a RENTAL PROPERTY in College Station for investment purposes, or for a loved one.. keep reading!

I get contacted quite often by parents looking to purchase their children or loved-ones a home in Bryan-College Station to use and in turn, rent out the other rooms for rent. This idea can be a GREAT decision for some families depending on the time they plan to keep the home, how many students or children of their own they will have living in the house, and budget and financial situation.

Depending on specific factors, it might be a great situation for you and your family to purchase a condo/townhome/home instead of “throwing away money” on overpriced dorms or apartments and lining someone else’s pocket.

So what are the benefits of buying verses renting in this case?

• Tax Write – Offs
• Rental Income
• Appreciation or Value Increases

What it comes down to: Is it worth it for you?

Plenty of parents have invested in condos and homes for their children or loved-ones and have had terrific experiences. In order to truly determine whether buying makes sense for YOU, you’ll need to do some math. First, it will be important to know the going room rate for the type of property you plan to purchase. Then calculate the total cost of renting over the course of 4-5 years (or however long you think you will own the property.) If you know your budget, you can calculate your monthly mortgage payments (if applicable) as well as your taxes/year. If you can estimate the amount of money you will have coming in from renting out part of the property, you should be able to easily compare those two scenarios. Be sure to factor in expenses for possible repairs. And as an added bonus, many properties in the Bryan/College Station area appreciate over time and when you go to sell your property you will also receive the benefits of the property value increasing over time. A WIN-WIN on so many levels!

If you need ANY guidance or assistance in deciding if renting or buying might be a good decision for you, feel free to give me a call and I would LOVE to share my knowledge and experience on the matter. Having rental properties myself and helping numerous investors, I can give you a great idea of what this would look like for you.