Rent First or Buy Now? Which Do You Choose?

Rent First or Buy Now?


Relocating is a huge step. Here’s what to consider if you decide to rent before purchasing a home in a new area.

 One of the first major decisions a relocating family usually makes is whether they will start their new life in a home they own or if they will rent first. Over the past two years, we’ve helped dozens of families relocate to the Sacramento area and have found that either could be a viable option depending on the family’s needs, financial picture and overall goals. Here’s a breakdown of the pros of both.


RENTING


A viable option if you’re unsure of whether you’re planning to stay in a new area.


  1. Low maintenance responsibilities: Your landlord or apartment manager should handle any re-pairs or upkeep, which is one less thing on your to-do list. Check your lease to understand your responsibilities versus the apartment manager.
  2. Lower up-front costs: Most rentals

       require a security deposit or two months’ rent — first and last — but that’s typically less                         than a down payment and closing costs on a house.


   3. Possible lower monthly costs: Whereas renting can be more costly than purchasing a home in           some areas, depending on how you finance your home, renting could save you on private                       mortgage insurance, property tax and other fees associated with homeownership.


   4. Greater flexibility: You won’t have to worry about selling your house if the relocation doesn’t               work out. You have the option to break your lease or simply put in a 30-day notice to move out of         your rental.


   5. Amenities, amenities and more amenities: Many apartment communities offer a luxury living           experience with amenities that can suit a busy lifestyle such as on-site fitness centers, swimming         pools, washer and dryers with-in the apartment homes and even parcel receiving services. These         conveniences definitely a plus, some of which you will not have depending on the home you                 purchase when you’re ready to buy.

BUYING

The best option to gain equity, invest in your future, & exercise freedom.

  1. Equity opportunity: As your home value increases over the years, you have the potential to make a profit after you sell it. If you’re planning to stay long-term, say 10-30 years, this can mean hundreds of thousands of dollars.
  2. Tax breaks: You could be eligible for

      certain tax breaks that allow you to deduct your mortgage interest and real estate taxes, which            can save you money on taxes.


  1. No Landlords: You have the freedom to make renovations and changes without having to get              approval from a landlord. However, check with the Homeowners Association and your                            neighborhood’s CC&Rs (as applicable) for rules and regulations on how far you can go with                    exterior changes and modifications.


  2. Pride and Freedom: There’s a certain pride that comes with homeownership. If you have                      children, a home is something you can pass on and have in your family for generations. The                  freedom of being able to use your home as an investment property in the form of a rental in the          future or as a short-term rental opens many possibilities.


  3. Fixed Mortgages: In 2017, Sacramento had the highest metropolitan rent increases in the nation,        rising on average by more than 8.2%. Since there is no maximum limit for rent increases under            California Law, this puts renters in an unsettling position, not knowing what their rents will                    increase to once their leases expire. As a homeowner, if you opt for a fixed mortgage, your                    payment will be the same for the entire term, which makes your budget predictable and                        manageable.

About our Team


The Sherri Patterson Team specializes in residential real estate and relocation, with a combined 75+ years of experience serving the Sacramento, El Dorado, Placer and Yolo counties. We work directly with hospitals, physicians and medical professionals. Whether you're looking to buy, sell or relocate to the Greater Sacramento area, we are the premier real estate team of choice. Our office is located at Keller Williams in Folsom, CA

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