Owning a home is something most of us strive for in our lives. There’s something about having your own home that apartment living or living with roommates just can’t match. When people think of being in their future home, they often imagine owning it. As we get older and wiser, we can all definitely see the benefit in renting our future homes as well, but how do you decide what’s right for you?

Buying Your Home

Buying a house is a huge financial commitment that should not be taken lightly. The average cost of buying a home in San Diego is $594,455, that’s not an amount to scoff at. If you’re looking into buying a home, you have to plan it out and have answers to important questions like: Where do I see myself in 5-10 years? Is my employment stable enough that I know I can make my monthly payments on time? Will I be meeting or stretching my budget? What standard of living will I be able to afford after my monthly payments?

Owning a home is a commitment, but it has many advantages that renting doesn’t. If you own your home, you can make it your own space. You can update however you want, whenever you want. You won’t have to wait on a landlord to take care of any issues that may arise. If you’re unhappy with something on your property you can change it. Owning gives you the ability to renovate, renew, and refresh your property. Renting does not have that benefit. You’ll have to go through your landlord for most things. With buying, you are the landlord. You don’t have to be picky about where you live based on the person running the establishment. There’s no worry involved in possibly moving in somewhere that has an unresponsive landlord or a landlord that doesn’t care about the property or it’s residents.

While buying is a great option and comes with a good deal of perks, there are also some risks that need to be considered. Buying a home comes with a lot of upfront costs. You’ll need enough money for a down payment and closing costs. Most people that purchase and sell homes must do so through a real estate agent. The buyer’s agent will receive a commission for finding, securing, and closing a home. The listing agent will also receive commission, which is usually factored into the selling price of the home.

Renting my Home

For many, renting may be the more achievable route to being in a home. The fees for rentals are often much lower than purchasing. The initial fee is usually a deposit and first month’s rent. Typically, the deposit on a rental is much lower than the down payment to own a home. It may cost less in the long run to rent because many of your needs can be fulfilled by the landlord. In most cases, repairs are the responsibility of the landlord. If the washer breaks down, the roof starts leaking, or the air conditioning unit breaks, the likelihood is you won’t have to pay for it. If you owned your home, these types of repairs would need to be paid for by you. When you own your home, you’re responsible for everything.

Renting a home is also a looser commitment. You’re not investing hundred of thousands of dollars into the property, which makes it easier for you to move around when you want or need to. There isn’t much tying you down to the home you’re renting, except for your lease agreement. 

Like buying, renting also has its drawbacks. As mentioned, renting usually means you cannot update or renovate your home in the way you want. What you see is typically what you get, which can sometimes feel like you’re living in someone else’s space and not your own. It also means that you have to abide by the rules and limitations of your landlord. Another drawback is that your rent may not be fixed. When you purchase your home, you know exactly what your monthly payments will look like and that won’t change (unless you refinance). Renting doesn’t have that security. The landlord may increase the rent of the property and you’ll either need to pay more or, if the new rent is not affordable, move somewhere else.

Something else to consider is that the rental price on a home might actually exceed the total cost of individually owned homes in the same area. Your landlord dictates your rent and they may factor in that their renters will not need to pay a down payment or closing costs on a home. Payments on a rental will never stop. If you buy a home, your payments stop once your total price on the home is paid off. Renting means making payments toward a property you will never own and possibly making payments for longer than you would on a home, depending on how long you stay there.

Finally, renting can often mean less stability. You don’t own the property. If the person that owns the property decides to sell, you’re now out of a home. Most of the time, you’ll get plenty of notice, but sometimes you’ll get short notice and have to scramble to find somewhere else to live. Renting means planning around someone else as well. What if you move in somewhere that has a four person limit, but you want to have another child or you need another roommate to cover the rent? What if the property doesn’t allow pets, but you’re looking for a companion? Sometimes these restrictions mean making sacrifices like finding a place that allows pets, but paying an extra deposit and pet rent. This might mean finding a home that isn’t as nice as what you want because you have to now factor in the amount of money you’ll need to support a pet. 

Let Us Help

At Cardinal Capital Group, we offer affordable and flexible hard money loans. Our rates start as low as 7% and we have flexible terms so we can work with you. We also don’t have a FICO requirement. Talk to one of our lenders today and let us help you make the smart investment!