Should You Buy a Home or Keep Renting One? Either Way, You’re Still Paying a Mortgage!
Branch Manager | Mortgage Expert | Passionate Cook
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Recently, a 25-year old Jacksonville resident asked me “Should I buy a home or keep renting one?”
That’s one of the most frequently asked questions I get when I share that I help people find solutions for their homeownership goals.
I answer by asking them the following two questions:
Do You Want to Keep Paying Your Landlord’s Mortgage?
Would You Prefer to Invest Your Money in a Home that Builds Equity for You?
It’s no surprise that most people prefer to enjoy the financial benefits of homeownership than putting cash into somebody else’s pockets.
In My Opinion:
There’s More Advantage to Buying a Home than Renting Someone’s House
If you’re ready to settle down in a community for a few years or more, then you owe it to yourself to consider the advantages of buying a home.
In my experience, buying a home and enjoying long-term financial and emotional benefits vastly outweighs spending your savings on rent.
Simply put, I’d rather be in control of my own home fortunes than give a landlord power over my housing destiny.
Always remember that at the end of the lease:
- They can raise the rent and impact your monthly budget
- They can sell their house and leave you looking for a new place to live
I wrote this article for two reasons:
- Share reasons why I believe buying is better than renting
- Mortgage rates are starting to rise quickly
I’m making it my mission this year to help as many people as possible make the transition from renter to homeowner before our historically low mortgage rates end this year.
Let’s Dig Deeper into the Advantages of Buying vs Renting
In this article, we’ll explore:
- Your Landlord’s Advantage of You Paying Rent
- Your Financial Advantage to Buying a Home
- Your Emotional Advantage to Homeownership
- How We Can Determine Your Best Course of Action: Buy or Keep on Renting
Your Landlord’s Advantage to You Paying Rent
Landlords love the fact that other people pay the mortgage on their homes.
The advantages to the landlord are clear:
You’re Providing Them Income
If you rent a house for $1,000 a month, that’s $12,000 per year ($36,000 in three years) they can use to pay a mortgage.
You’re Building Them Equity
As they pay their mortgage with your money, you’re helping them to pay down their loan principal and build wealth from the rising equity of their home.
You’re Helping Them Enjoy Home Value Growth
By paying rent on their property, you’re allowing them to realize potential appreciation in the value of their home on your dime.
BTW, Zillow Home Value Index forecasts Jacksonville home values increasing by 4.8% by December 2018 (as of January 2018).
That’s great news for landlords.
However, Homebuyers shouldn’t worry about appreciating home values just yet. Instead, they could consider this an opportunity to purchase a home while prices are still affordable and interest rates still historically low.
You’re Giving Them the Power to Determine What to Charge You in Rent
Each time your lease is up for renewal, they can adjust how much you pay in rent.
BTW, Zillow Home Value Index shows St. Johns County Rental list price increased from $1,700 in December 2016 to $1,950 in December 2017.
Keep in mind: Homeowners who got a fixed rate mortgage two years ago are still making the same monthly mortgage payment today—and will continue to do so through the life of that mortgage.
You’re Giving Them Control Over Where You Live
Regardless how long you live in their rental home, they ultimately control the use of their property.
As the lease agreement ends, they can determine if the market conditions are right to sell their home and realize a profit.
Also, they could decide to move into their home (perhaps they had moved out of the area for a temporary job or military assignment).
Their decision on the use of their house could leave you and your family in a lurch—scrambling to find another place to live.
- Landlord’s own the house—you don’t
- You’re going to pay a mortgage—either the landlord’s or your own
With that in mind, it might be smarter to make a home payment that’s to your advantage—not your landlord’s.
Your Financial Advantages to Buying a Home
Buying a home can bring you many financial benefits.
Let’s explore a few:
You’re Investing Your Money in Your Financial Future
Each time you pay rent, you’re not increasing your future fortune.
I look at it this way: If you pay $1,000 a month in rent, your landlord gets the benefit of your $36,000 in payments every three years.
That’s money you could use to build equity in your own home.
Every mortgage payment reduces your account balance and increases your home equity—which is yours to use.
That equity can be the nest egg for your retirement, starting a business, funding a child’s education or achieving any other momentous life goal.
You May Build Wealth with the Resale Value of Your Home
As I mentioned above, Zillow Home Value Index forecasts Jacksonville home values increasing by 4.8% by December 2018 (as of January 2018).
I believe that trend will continue because Jacksonville housing supply is inadequate for the demand.
According to the January 2018 Fannie Mae Multifamily Market Commentary, Jacksonville could experience a 3.2% projected job growth this year (one of the highest in the nation).
That could create a demand for 3,600 housing units. But the area will only have less than 1,800 units available.
If you continue to pay rent, you can’t participate in this potential increase in home values throughout Northeast Florida.
You Pay a Predictable Mortgage Payment that Won’t Increase
It can certainly make budgeting easier when you know that your fixed-rate mortgage payment will remain the same 2, 5 and 10 years from now.
When the lease is up on your rental, your landlord can increase your rent payment.
As long as you have that mortgage, you’ll continue to make the same mortgage payment.
You Can Enjoy Tax Advantages
I’m frequently asked about how the changes in the tax laws will impact homeowners. While I’m not a CPA (you might want to consult with one for further details), I firmly believe that owning a home can help reduce your tax burden.
Mortgage interest is deductible to a total of $750k of mortgage debt for first and second homes.
For the average homeowner that itemizes their taxes, that’s a great advantage.
Your Emotional Advantage to Homeownership
When past mortgage clients call me a year or so after closing on their first home, I’m heartened to hear of the pride they take in owning a home.
They tell me they enjoy:
The Freedom to Make the Home Your Own
When you own a home, you make the decisions—not your landlord.
Want to paint a room a certain color? All you need to do is head to the hardware store and pick up the paint.
Think a new deck in the backyard would be great for entertaining? By all means, build it. That’s your yard.
Want new cabinets? You don’t need your landlord’s blessing.
And the great thing about home modifications is that your efforts may increase your home’s value. That’s money in your pocket—not your landlords.
A Sense of Privacy
Your landlord has the right to visit their property. While landlords typically must notify you before visiting, leases can specify property visits for:
- Scheduled inspections
- Pest control
- Show home to prospective buyers
As a homeowner, you’re the only one with a key to your house. That means no interruptions to valuable family time at home.
How to Determine Your Best Course of Action: Buy a Home or Keep Renting
I love helping people move from being renters to homeowners. The first step is making sure you’re ready to make that exciting transition.
That’s why I offer a:
Homebuyer Readiness Analysis
Together, We'll Take a Look At
Home Buying Readiness: I’ll review your credit, income & other items to make sure they align to give you the best possible home financing terms. If you think you’ve got credit challenges, let’s see what I can do—you might be pleasantly surprised.
Home Buying Game Plan: I’ll help you come up with a home buying strategy that will get you the home you want and deserve.
Preapproval: I’ll help you take full advantage of a preapproval, which may help you streamline your house hunting, strengthen your negotiating power and get you to closing faster.
Thinking About Buying a Home?
Rates are Rising. Renters Shouldn’t Hesitate.
If you’re ready to be a homeowner, now’s the time to act. While nobody can predict the future, trends show that mortgage rates are going to continue to increase throughout 2018.
And I’d hate to see anyone miss out on the financial and emotional advantages of homeownership.
Let’s Schedule a Discussion
Give me a call at
We'll put you on the calendar to discuss what home financing advantages I can help you achieve this year.
I look forward to speaking with you.