Buying Versus Renting – The Age Old Question

Where to Start?

For many newly married young couples making their first foray into the property market, the choice between buying a home or renting one, can be a daunting decision. The same, of course, applies to families moving to a new city where conditions may be very different from the old place. So it’s not surprising that the general consensus, is that it is far wiser to start off renting.

What About the Long Term View?

What, though about the longer term? Could renting still be the better proposition than buying? Here the answer is far more complex. Let’s look at a few scenarios and compare them.

Realtors will always tell you that buying is better than renting. The major argument they make is that a house is an investment that will always appreciate in value over the long term. In addition, as the argument goes, the mortgage payment that you are making to the bank each month is actually a form of saving, while any rent money you are paying is actually money that is lost.

How Do They Compare?

Let’s look at that argument a little closer. While it’s true that the rental payments can be regarded as money that you have burned, the same argument can truthfully be applied to the interest you are paying to the bank for the privilege of obtaining a mortgage! For a fairly standard 30-year mortgage, most of the money you are paying each month is going purely to cover the interest, and mighty little is going to reduce the capital. True, this will change over time, but not for decades! So for many years, almost all of the monthly mortgage payments is also money down the drain.

Will Real Estate Always Appreciate in Value?

Now if you were one hundred per cent certain that your property would appreciate in value over the years that you owned it, this might mean that you’d come out at the end saving money by purchasing rather than renting, but there is more to it than that!

The Rental Safety Net

When you rent, you are in effect guaranteeing that the property will be fully maintained at no expense to yourself. When you own the property, a very different picture emerges! All the expense of redecorating in the event of a leaking roof, and the cost of repairing the roof itself, will come out of your pocket. True, you can insure against some of this, but that costs money, and you can’t insure against every eventuality.

Repainting the inside and outside of your home every few years, when weather or small dirty hands makes this necessary, is an expense that will come straight out of your pocket, and so it goes, on and on. Property taxes are payable on self-owned property, and should your heating or cooling system stop functioning, guess whom is going to have to pay for a new one?

What Happens When You Need to Sell?

So while it may be that your property will increase in resale value, that is not a certainty, and what if you need to sell at a time when the market has dipped? Ever notice also how property values in an area can take a drastic downturn due to unforeseen changes that can end up affecting the neighborhood? Try and work out how to second guess that one!

The truth is that there is no certainty as to which road to go down, but being able to just up and move to a new home in a new neighborhood when you are renting, is a plus that you should not lightly overlook.

Why You May Prefer to Rent

Renting in an area where you can walk to work is a massive plus, exercise is so important, and if you have a park in the vicinity it makes it even more attractive. Your building is quite likely to have covered parking and controlled access, which provides for great peace of mind and quality of life. High speed internet access and such amenities as trash disposal chutes or services, right from your floor, are pretty standard too. Add to this all the availability of emergency maintenance and a like-minded community literally on your doorstep, and you have the makings of a very comfortable lifestyle.

Amenities and Shopping

The ready availability of entertainment amenities and abundant shopping right on your doorstep when you choose the right area, could easily seal the choice for you. The trend today is towards this type of neighborhood because of all the advantages it provides, and don’t forget that nearby public transportation is probably a given, too.

The Longer Term Picture

At the end of the day, the choice will always be yours to move out to the suburbs and buy your own home should you every feel the inclination, but a move in the opposite direction may be much more difficult should you need to sell a home when the market has dropped.

Trendy Baltimore Areas

The type of exciting and trendy areas where all this can be found in downtown Baltimore is around Federal Hill. Exciting new complexes such as the luxury rental accommodation at 1201 S. Charles Apartments provide all this and more for the discerning renter. It’s time to go have a look for yourself and then make the choice.

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