Should you be Leasing or Buying a home?

Hello lovelies,

It is kinda a tough question and in my very individual point of view has no right or wrong answer. It is a very personal choice and with either option you have a place to stay and as they say lay your head to rest. However, at some point in our adult lives we begin to think about this very question and wonder if we want to stay put in our current location or explore other cities or countries without having to feel tied down to one single spot or dread having that responsibility that comes with owning and then moving away.

Do you need to buy or have to buy?

I remember being 23 and my mother telling me that I should buy something vs renting an apartment. Truth be laid out I did buy a place to live and call my very own 13 years later. When she 1st told me that I was like OMG, what a commitment!!

I was scared, I thought there was no way in hell that a dumb 20 something year old could do that and I did not know if I actually wanted to stay put where I was in that current city. That was it. I was most likely not able to being so young and poor, even though I was working it was not my “dream” job and hello I was still a college student so how could that even possibly happen is where my self limiting thoughts went to. Then the reality of being an actual homeowner was asking myself if I truly wanted to stay in San Antonio? Never did it cross my mind to buy something tiny, at least TRY  and see if I could get anything and IF and WHEN I was ready to move that THAT would be my 1st investment property and lease it out! I thought we all have to pay for where we live, right?  So, in my young undeveloped mind, I was like hey it is totally worth my money to rent BECAUSE I live somewhere and not on the streets and also I did not have any roommates just the way I enjoyed it after 3 failed attempts after graduating high school and deciding that I no longer wanted to live with my parents and it was time to go. I was 17.

Fast Forward, 20 years later and I was like WTF did I get myself into? WHY in the hell did I buy a freakin home?!

Literally my expenses increased BY $400/500 more, not only did I have a mortgage where most of the payment goes to interest (for like more than half of the loan term), I was now responsible for paying SEPARATE companies for every single utility, it was not tied into one lovely payment anymore, gas, trash, electricity, water and the Mofo of all Mofos a HOA  plus TAXES that will and have been increasing due to living in a “hot market”. I remember not having water for 2 or 3 days because I was the one that NEEDED to call them and connect it, duh, I know. SO, they turned it off until I created an account and linked a banking account to it. Super fun….funniest part of it all was thinking that it would be a fair price. “HA HA HA bless your soul “, Ceelo Green sings to me. While the consumption of water was a decent rate when I got my first bill, it also included this wonderful reoccurring service fee charge for using this particular water company (which is the only one available in my area since it either bought out the small guy or made a deal with the city to monopolize) and charged me 49.63 for water and 46.29 for sewer (thats when you flush ladies and gents). This means that if I were to leave lets say for a month and use ZERO amount of water for the entire month, I will still have a water bill close to $100 just for having the service! And that was just my story with the water bill… yup, I got one for the trash and HOA tho my point here is not to discourage ANY one from buying just mainly creating awareness that it is overwhelming. It is a huge adjustment! Can you do it? Certainly! Of course! You can do anything and everything you want to, really!

How to decide if you should rent or buy a home.

That is the individual and personal question. I have not gone into the aspects of interest rates and budgeting since I am literally STILL LEARNING along the way, everyone. It has been a journey for sure, and I must and choose to be grateful for the situations and circumstances that I put myself into and that present themselves cuz otherwise life would be more of a hardcore constant drama with no comic relief in sight.

Takeaway thoughts

• Renting or buying depends on your lifestyle, financial situation, and personal goals.
• Both provide a roof over your head and a place you call home
• Both require regular payments and income in order to make those payments
• Renting offers maintenance to assist with any repairs, and somewhat predictable monthly expenses.
• Homeownership brings tax deductions and building home equity. Plus homeownership pride that this is YOURS!
• Renting is not throwing away money every month and owning does not always build wealth or equal the American dream
• Buying is huge investment and if you are savvy enough can turn it into an asset vs a liability, however this takes some time and smart money moves. Think becoming a landlord or an Airbnb host.

Just a lil food for thought when comparing expenses that you generally do not have to pay as a renter:

• Property taxes, that can increase, like when your lease is up and you renew, each year or so depending in your market.
• Trash pickup, and you are also responsible for recycle trash pickup here in Texas.
• Water AND sewer services
• Pest Control
• Any appliance maintenance, inside and outside, think your A/C unit or plumbing system, unless you paid for a home warranty which is an upfront fee for the year ($700-$1000) and in any event, when and if you use it does charge you a certain deductible ($75-150) for the service, however, think of this as your maintenance crew that you hired.
• Homeowners insurance, no getting around this one.
• Lender-required flood insurance, however this type of insurance strongly depends on the area.
• HOA fees that can vary from community to complexes.
• Yard maintenance, or landscaping enhancements.
• Home repairs, that is all you, hole in the wall, broken door, it is up to you to fix that.

I hope this gave you a tad of an inside look into this topic and possibly the beginning of a pros and cons list if you are debating what works BEST FOR YOU  not anyone else. Just keep in mind it is a very personal choice and decision and numbers are just one way of comparing. I would like to mention as a last note and possible consideration in the chances that you and your partner have decided to embark in buying a home of your own while you both go into it as a dual income consider how much you can afford on ONE income, this allows some flexibility for all the wonderful lessons and such that life throws at us to see how we handle it.

Cheers,

         Davina