What is better; Renting or Buying? This may not be the appropriate question to be asking. You should be asking what is best for you, and your situation. The answer depends on lots of things. You should analyze your situation and see which option best suits you. Both renting and buying have their  advantages. Some points that you might want to consider are:

• Do you have a desire to own your own home or are you happy with simplicity of renting? There’s always something that needs fixing around the house.
• How stable is your job? Is your rent or mortgage payment dependent on more than one salary? Do you have enough savings to last you for about six months in case one or both of you lose your job?
• Are you likely to move in the next 3-5 years? (It may take that long just to break even if you need to sell your house unless your employer is paying for your move as well as handling housing issues. There is no guarantee that house prices will remain at their current level or increase over time.)
• How much are you paying for rent?
• Do you expect your rent payment to increase?
• Are you comfortable with paying that?
• Would you be OK with paying the same amount for a house note plus expenses?
• What are your total expenses for rent, utilities, other? Write down all of your monthly expenses and use them for comparison. If you multiply your monthly rent by 100, that will give you a rough estimate of the PITI (Principal, Interest, Taxes, Insurance) on a house that you might buy, based on 3% down and 6% interest rate.
  Use this calculator to more closely estimate the principal and interest payments on a mortgage. Add in the cost of appliances and services that you may need for the new house.
  For example the monthly payments for a $150,000 house, when financed at 4% with 5% down, an insurance rate of 1%, property taxes of 3%, and HOA fees of $500/year would cost about $1200/month. Added to that would be utility costs of about $300/month. The insurance cost would be increased by the flood insurance cost and windstorm insurance costs, if applicable. I strongly recommend that a home owner purchase flood insurance, even if you are not in a flood zone.
  Contact your lender, and your home owner’s insurance agent, for a more accurate amount for a specific house that you are considering to purchase.
• Are you on a month-to-month lease, or are you on an annual lease that has some months left before it renews? Do you know how to properly terminate your lease?
• Do you like where you are living? (How’s the parking? Do you have a safe place to park your car? How do you like your Landlord?)
• Do you have pets, or want them?
• How safe do you feel, where you are? How concerned are you for your children’s safety?
• Do you have a safe place for your children to play?
• Do you think that the local schools are the best for your children? Do you want your children to go to better schools?
• Will you children be changing schools? Before the end of the school year?

 

Thinking of buying?

• Work with a REALTOR®, it’s free.
• How much can you Comfortable Afford?
• Determine your budget and stick to it
• How much savings do you have? Do you know how much closing costs are? (You can use 10% of the sales price as a rough estimate for down payment and closing costs needed for the purchase, depending on any assistance that you get and the type of financing.
• Learn how to buy a great house before beginning.
• How much will it cost to move? How will you manage the transition if you need storage or temporary lodging?
• Do you want a house that is move-in ready or are you wanting a fixer-upper? Fixer-uppers may not be approved for financing so be sure to discuss this with your lender, unless you are going to pay cash for the property.
• How much does it cost to remodel a house?
• Are you thinking of buying a stand-alone house, duplex, townhouse, or condo? Highrise condo? There are different costs and insurance considerations for each type of housing.
• Have you contacted a lender to see how much you can get approved for? How much would your monthly payments would be for Principal and Interest? (Taxes, Insurance, and HOA fees will vary, depending on where your live and the value of the home that you purchase.)
• Will the value of your house increase while you own it? (Who knows?)

 

Use an amortization calculator to examine the loan balance over the span of your mortgage. You can periodically get a free estimate of how much you can sell your house for by sending a request to me here.

This chart shows the sales price trends from 2005 through 2015 using a typical 3 bedroom house as a model for the Pearland 77581 market area. This chart does not include foreclosures or short sales but shows the dip in sales prices that began in 2008 and finally recovered in 2012. This was a very severe recession and it took four years to recover. Future recessions and downturns in the economy may or may not produce similar results.

Use this rent vs purchase calculator to help get and idea of the financial difference in today’s market.

Check out the Down Payment Assistance Programs to see if there is assistance that you may qualify for.

There are definite advantages to renting:

• Mobility. It’s easy to move to a new location after the first year of renting.  After the first year, you are generally on a month-to-month lease so it becomes much easier to terminate the lease and move.
• You just have to pay rent, utilities, and your renter’s insurance premiums.
• You don’t have to worry about paying property taxes, or fixing things that are broken, unless you broke it.
• You don’t have to be concerned with painting, carpeting, or repairing anything.
• If you live in an apartment, and you want to take a trip somewhere, you don’t have a lot to be concerned about since your apartment has neighbors that can alert authorities if they know you are gone and notice something out of the ordinary going on.
• If the place burns down or floods, while your are gone, the building is not your concern and you have insurance to cover the personal things.
• It’s cheap to get into a lease property, usually requiring one month’s rent plus a refundable deposit.
• If you lease a house and  there is a pool, you should not have to maintain it.

 

There are some disadvantages to renting:

• No pride of ownership. Less sense of stability. You are not building equity.
• You can’t change anything, without written permission from the landlord.
• It isn’t your property. You are living in someone else’s house and you can’t change anything without getting written permission, in advance, and the Landlord can always say NO. The Landlord, on the other hand, can change anything, at any time, and you have no say in his decision.
• Unless you rent a house, you have no secure, private, yard for your children to play in.
• There may not be a garage to park your cars in.
• Reduced sense of stability that home ownership provides.
• If you you are renting an apartment or condo and neighbor burns his house down, yours can burn too.
• You can’t have pets, including a fishbowl, on the property without having permission from the Landlord and paying another deposit (usually non-refundable). The Landlord may also not allow certain breeds of dogs and may require you to maintain a high level of liability insurance.
• If the size of your family increases, and you need more room, you can easily move but the cost of renting goes up significantly with the increase in number of bedrooms required.
• The owner of the property can change, at any time, without your consent or knowledge.
• If the property owner wants to show the property to prospective buyers, you have to let them in to the property to browse around and check things out.
• Your Landlord can terminate your lease, if he chooses not to renew.
• Your rent payment amount can change anytime after the initial terms of the lease expires. It can go up each year, or each month, depending on the terms of your lease contract.
• You can’t change the color of paint on the interior, change the appliances, or make any modifications to the property, including locks, unless it is specifically written into the terms of your lease.
• Don’t even think about hanging that big screen TV on the wall, without written permission from your Landlord!
• You are not building equity. Even though the sales prices of houses fluctuates, you will eventually build significant equity to leave to your heirs or to use for your retirement, etc.
• The money that you pay for rent does not build up any equity, ever. It’s just gone, without a return on your investment.
• Your Landlord may not take care of the property like you would like them to. Somethings may not get repaired or replaced and you have virtually no say in how things are done or what brands of appliances are purchased for the home.
• There may not be a lot of privacy and the walls may be thin enough to hear everything that goes on next door.

 

Owning a house isn’t for everyone but, if you want more information about buying a house, house prices, or want more information about loans and purchasing assistance, fill out this form and let me know what you need assistance with and I will be happy assist you.