One of the greatest debates for Austin residents is whether to rent or buy a home. Home Union, a real estate investment firm, recently released a forecast predicting Austin would see a five percent growth in rental prices this year. This would put the average cost of renting an Austin area home at over $1,700 a month. According to the Austin Board of Realtors, home prices also increased 9% in 2015 compared to 2014, with a median price of $263,900. No matter whether residents choose to rent or buy a home, we will continue to see strong demand for housing as the Austin area continues to grow. This can make the decision whether to buy or rent a home difficult; however, careful consideration and planning can make your dreams of homeownership or renting a reality.
Consider these three questions before committing to renting or purchasing a home:
How Long Do You Expect to Live in a Home? Your current lifestyle and future plans are some of the biggest factors in determining whether you should rent or buy. If you plan to put down roots and settle into one area for five years or longer, buying could be a better investment. However, if you see yourself relocating for your career or moving to another area of Austin in the next one to two years, renting may be a more sensible option. You might even consider renting in a neighborhood before committing to buying to see if the area is a good fit for you and your family.
What Does Your Financial Situation Look Like? Your finances may be the determining factor in whether you should buy or rent. Buyers typically produce a 20% down payment when they commit to buying a home, so if you don’t have enough put away, renting may be a better option while you save up. You may also think about renting a home if your savings are going towards other expenses. Finally, good credit is an important factor in securing a home loan. If your credit could be in better shape, think about postponing a home purchase.
How Do the Costs Compare? There are different expenses that come with buying a home compared to renting. Homeowners must consider the costs of property taxes, maintenance, utility bills, and insurance, to name a few. Landlords typically cover maintenance costs and even some utility bills, but renters are responsible for rental insurance and possibly additional fees like pet deposits. Take some time to get out your calculator and add up all the costs that come with buying versus renting.
If you're unsure whether you should buy or rent a home, take some time to talk to a Realtor about which option is best for you. A local Austin agent can help you understand the state of the Austin market to help you make your decision. Our agents are experts in the Austin market, and eager to answer your questions about Austin real estate. Contact us today to get in touch with one of our top agents.