Rent or Buy?
The decision to rent or buy in your new location is dependent upon many considerations unique to your personal situation. Some of the potential factors involve the tax implications, down payment, other investment vehicles, the length of time you are anticipating being in your new location and whether or not your current home has sold.
If you decide to buy, should you purchase an existing home or build a new one? Again, many factors have to be considered. Will an existing home need a lot of repair or remodeling to bring it to your standards? What about the difference in the cost of operation and maintenance between new and an existing structure? How should you finance a renovation? Which home will appreciate faster? Will it be difficult to get a construction loan? Is it better to rent for a while to become familiar with neighborhoods in your new city? What about capital gains tax if you don’t close in time?
We suggest you seek the advice of a certified financial planner and a realtor to thoroughly clarify your options. These choices can become quite complex.
Some Advantages to Renting
Whether you’re in your first apartment or a longtime resident, there are many advantages you are afforded by choosing apartment living.
Mobility: You enjoy the freedom to move, to accept that better job, to take the vacation you’ve dreamed of.
No maintenance: Just relax and delight in the grounds and facilities maintenance technicians keeps attractive for you.
Flexibility: You have the ability to increase or decrease your living space without the burden of sales pitches, closing costs, interest rates or the high cost of maintaining a home and property.
Location: The choice is yours!
Recreation: Chances are, you’ve chosen an apartment community with a swimming pool, tennis court, weight room or sauna. Apartments have the equipment and people to maintain them, which is no small task for the homeowner.
No waiting: If you’re like most apartment residents, moving into your apartment was easy and fast. You settled into your new home without lengthy paperwork, a loan approval period or a large financial investment.
Your Current Residence
As you prepare to move, a big decision may include whether to sell or rent your current property. Ask yourself the following questions as you make this decision. You may also want to ask advice from a real estate agent.
Market
Is it a seller’s market? Signs include low interest rates and shortage of homes for sale. How long have similar homes been on the market and how long are you willing to let your home be on the market? Or is it a good rental market and do rental units have tenant waiting lists? Is your property in a trendy area? Desirable areas typically garner higher rents and seldom have vacancies.
Financial
Is this property good for rental income? Can you charge more for rent than you pay for mortgage, taxes and upkeep? How will selling affect your federal and state tax situation? Furthermore, if your property does not sell quickly, can you afford to keep the home vacant while it’s on the market? If not, do you feel you will be able to find a renter on a short-term basis? Are you likely to want to move back into the home some day?
Rental Tips
Apartment experts say that some detective work is needed to conduct a search that finds the most livable rental residence for the money. After you have weeded out a good apartment complex from many rent signs and/or listings, scanned the neighborhood you like for the best rental possibilities, you will be ready to scrutinize each property and landlord for shortcomings. It is easy for a prospective tenant to gather quick clues about the general care, maintenance of the building, and cleanliness of the area overall. Try to talk to the tenant who is vacating the apartment you are planning to rent. He or she can tell you a great deal about the pluses and minuses of living there. Here are some tips for inspecting the inside of the apartment:
Is it clean? Carpet should be cleaned and walls/ceilings should be freshly painted. Does the apartment have a bad odor? It could be a tip that the prior tenant had a pet or cooked spicy foods.
Check room sizes with a floor plan. Make sure the furniture that you will be moving will fit. Is the bedroom near the bathroom? Does the dining room adjoin the kitchen?
Inspect kitchen appliances. Check the stove to see if all burners work. Does the range have a hood with a fan? Is the oven self-cleaning? Is the stove gas or electric? If it is gas, you may have an extra monthly charge for cooking gas. This would also be true if you had a gas clothes dryer in your unit. Check out the refrigerator/ freezer for storage space. Is there enough counter and cabinet space? Don’t forget to keep an eye out for bugs, especially in a high-rise building.
Inspect the central air conditioning and heating systems. Ask other tenants if there is enough heat in the winter. It can be costly if you have to buy or rent window air conditioning units.
Is there enough storage space? Do you have enough closets for clothes, linens and general items. Are there built-in shelves and bookcases for books and DVDs? Do you also get a storage space that is not adjacent to the unit?
Does the building have special amenities such as a swimming pool, game room, barbecue area, and exercise room or tennis courts? Keep in mind that recreational amenities generally will increase your rent. You should consider what features you will really use.
How is the noise level in the complex? Have neighbors been playing music louder than you prefer? Are you located by a major airport, freeway or train tracks?
Do you need an apartment that takes pets? If not, do you want to live in an area that does? Do tenants appear to be cleaning up after their pets? What is the management policy for pet size and maintenance?
Rental experts suggest that tenants should tour several apartment complexes before placing a deposit on a unit. The minimum deposit to hold a unit is usually $100. Prospective renters still need to fill out an application and pay an application fee. This will hold your unit while your employment, credit and rental histories are being checked out. This process usually takes 7 to 10 days to complete.
Making a final decision and determining which house to make an offer on shouldn’t be taken lightly. The decision should be made rationally and not guided by emotion. You most likely won’t have the luxury of taking your time on deciding which house you’d like to pursue. However, since it is such a major decision you would like to base it on factual information. Some broad categories to consider are:
Appreciation
Ask your real estate agent to retrieve sales of homes in the neighborhood over the past few years. If one neighborhood shows an annual average 8 percent increase and another is skyrocketing at 15 percent, you may have your decision made.
Crime
Go to the local police or sheriff department and ask about crime in your specific neighborhood. You might find theft or vandalism to be more prevalent in one area than another. Also please visit the website, www.familywatchdog.us. When you visit this site you can enter your address and a map will pop up with your house as the small icon of a house and red, blue, green, dots surrounding your entire neighborhood. When you click on these dots a picture of a person will appear with an address and the description of the crime he or she had committed.
Drawbacks
Rarely will you be lucky enough to find a perfect place. Think about the cons associated with each house and determine to correct them or how much of a negative impact each will have.
The House
Make a list of the amenities and attributes you want your house to have. Be specific. Prioritize that list. Then, rate how each house measures up to each need on your list.
Neighborhoods
If you have kids or pets and being close to a park is important, you’ll want to consider that. How close are shopping, restaurants, churches, and other services? Are the streets maintained? How do your prospective neighbors keep up their property? How long will your commute to work be?
Property Taxes
Property taxes may vary from one neighborhood to another. This can sometimes affect whether you view a community as a desirable place to live. Higher property taxes often mean newer and more modern schools, well-maintained roads, and bountiful community services.
Schools
If you have school-aged children and plan to send them to public school, you definitely want to consider the reputation of the neighborhood school. If you plan on sending your child to a private school, how long is the commute? You will likely spend a lot of time driving your child not only during the school day but for extra-curricular events outside the daily school schedule. Which ever school you decide, you can usually find general district information and state standardized test results online. Always plan a visit to the school and receive the information first-hand from school administrators. You should also talk to teachers and parents.
Sellers’ Situations
If you don’t know already, ask your real estate agent how long the house has been on the market. Usually the longer a house has been listed, the better chance the seller will accept an offer lower than asking price. Conversely, if the house has been on the market for just a couple days, the sellers will probably wait for a better offer if you offer less than the listed price. Your real estate agent might also be able to dig up additional information about the sellers, like why they’re selling. If it’s a job-related move or a divorce, the sellers likely want to move as quickly as possible, meaning you have a better shot at them accepting a lower price.
Style and Substance
The SUBSTANCE are things that cannot be changed such as the location, view, size of lot, noise in the area, school district, and floor plan. The STYLE represents easily changed surface finishes like carpet, wallpaper, color, and window coverings. Buy the house with good SUBSTANCE, because the STYLE can always be changed to match your tastes.burglary, storms, and vandalism.
