Better Homes and Gardens Real Estate Life

Tag: house renting

  • Renting vs. Buying a Home + Pros and Cons for Each

    Buying a home has long been part of the American dream, but homeownership isn’t for everyone. Sometimes, renting makes more sense and offers greater freedom.

    Have you been wondering about renting vs. buying? Choosing whether to invest in a home or pay rent is a big decision that depends on your finances, lifestyle, and personal goals.

    One isn’t inherently better than the other. Both require an income to afford housing payments unless you have enough money on hand for an all-cash purchase, but even then, you need to consider your overall financial picture. Renting and buying come with various degrees of maintenance responsibility and commitment.

    Whether renting or buying is right for you depends on your current situation and an honest look at where you think you’ll be years later.

    So, use our guide to renting vs. buying and consider the pros and cons for each. Then, remember that we can’t make a perfect choice, but we should be wise enough to carefully weigh all our options.

    Renting a Home 

    Renting a home offers flexibility. There’ll typically be someone else to tend to maintenance issues. You’ll probably have predictable monthly expenses, so you can likely count on extra cash in your budget. However, many rentals require you to adhere to a list of community and individual unit rules (e.g., your landlord might not be flexible if you want to paint your bedroom bright pink).

    When you rent, you’re not necessarily throwing money away (you have to pay to live somewhere, even if you buy), but you’re not building wealth either. Here are some pros and cons for renting a home.

    Pros 

    Many people find immense benefits to renting. The following are reasons why you might want to rent your next house.

    • Flexibility. You can probably move quickly if you need to (as long as you’re not in a lease or are willing to pay to break your lease)

    • Predictable housing payment. Your housing costs (including utilities) may be consistent each month since you won’t have to factor in repairs and other expenses.

    • Low maintenance. You’ll likely have a landlord or property manager who will handle major maintenance tasks (but be prepared to change your own lightbulbs or fix minor problems).

    • No property taxes. The owner of your rental is responsible for paying taxes on the property.

    • Less strict financial standards. Getting approved for a rental unit is often much easier than qualifying for a home mortgage.

    Cons 

    Renting can seem like the best option if you don’t want to deal with surprise expenses or repairs, but there are some drawbacks.

    • Rent increases. Landlords can raise your rent after your lease expires, especially in areas with high housing demand.

    • Possibility of a property sale. The owner of your rental may decide to sell the property, especially during times of rising home values, leaving you looking for a new place to live.

    • No tax benefits. You won’t get to claim homeowner deductions on your taxes.

    • Limited personalization. When you rent, you usually can’t do what you want with the home (no building your dream kitchen or entertainer’s backyard, in most cases).

    Owning a Home 

    When you own your home, you get to make decisions about what to do with almost all aspects of your property (condos, townhouses, and other properties with homeowners associations may significantly limite your freedom). But you’re the one responsible when something goes wrong too. Purchasing your next house can provide pride of ownership—a place to truly call your own. However, picking up and leaving may be diifficult if you change your mind, have a job transfer, or experience an emergency that uproots you.

    Pros 

    Is owning a home right for you? There are benefits to purchasing, including the following.

    • Sense of stability and community. Owning can offer more assurance that you’ll enjoy the fruits of a neighborhood for an extended period.

    • Builds equity. Most real estate increases in value over time.

    • It’s yours to improve. Decorate, renovate, and add on as your heart desires.

    • Tax benefits. Homeowners can claim a mortgage interest deduction on their taxes.

    Cons 

    Wondering what might not be in your best interest when it comes to owning a home? Here are some reasons you might want to give homeownership a second thought.

    • Responsible for maintenance. As a homeowner, you’ll have to tend to all repairs (or hire someone) and bear the cost of all maintenance.

    • Requires a sizeable financial commitment. You’ll have long-term expenses like property taxes and homeowners insurance, along with a hefty initial investment (including a down payment and loan closing costs).

    • Property value may decrease. While most real estate increases in value, you might lose your equity in the property.

    • Difficult to change your mind. It’s not easy to pick up and move if you change your mind about where you want to live or if life’s circumstances call you elsewhere.

    Still not sure if you should rent or buy? Ask yourself the following questions to help make the decision easier.

    • How long do I plan to live in the area?

    • What are my finances like?

    • What is the state of the housing market?

    • How does my job factor into this choice?

    • What are the costs of renting vs. owning this particular property?

    Are you looking to sell or buy a new home? Let Better Homes & Gardens Real Estate® walk you through the process.

  • How to get your house ready for renters

    Even if you bought your home to live in rather than as an income property, you may end up renting out your house at some point. A contract opportunity on the other side of the country (or the world), a drop in property values that means you want to build up more equity in your home before trying to sell it, or a formal or informal sabbatical might mean you want to rent rather than sell.

    Here’s how you can get your house ready for renters. While it may seem like a lot of work and a moderate amount of money, it’s well worth it. Good tenants are attracted to well maintained, trouble-free properties, and good tenants are hopefully the only kind you’ll ever have to deal with.

    Start with the exterior

    Make sure all your exterior maintenance is up to date. That includes landscaping, raking, gutter cleaning, roof repairs, and checking, cleaning and replacing exterior lights and/or sensors. Test and repair any exterior railings and make sure pathways are safe. Replace any broken interlock.

    Get the screens cleaned and the exterior windows washed.

    If you don’t have keypad locks, you might want to consider changing the locks for the front, back, and side doors and any mailboxes.

    Contact your insurance broker and arrange to switch your policy from homeowners to landlord’s insurance.

    If your tenants are going to be responsible for lawn maintenance and snow removal, make sure they’ve got the tools they need to do the job, whether they supply their own or you provide them. If you have a mortgage on your home, let your bank know when you’ll be renting out your house rather than occupying it for the term of the initial lease anyway.

    Draw up a condensed list of HOA rules your tenants need to be aware of and abide by. Being caught in the middle of a dispute between the HOA and your tenant is an uncomfortable place to be.

    For a bold new look that doesn’t cost a lot or take long, consider painting your front door. Red doors were popular for years and still provide a great “pop” of welcoming color. But increasingly, dramatic black and medium or dark blue doors are trending these days.

    Tackle the interior

    Start at the top of the house and work your way down. This is the time to declutter in earnest, so plan to make more than one trip to the thrift store to drop off old furniture, toys, clothes, and games, or plan a yard sale or two.

    At the very least, you should wash all the walls and ceilings of your home before you put it on the rental market. Deal with potential problem areas that need to be dealt with, whether it’s drywall or plaster repairs, paint touch-ups, or, worst-case scenarios, a leaky pipe or insufficient ventilation.

    Remove all your window fittings and wash curtains or blinds. Vertical or wooden blinds may not be removable, but they can still be vacuumed or sponged. Wash the interiors of your windows.

    If you can afford to have the interior repainted in neutral colors from top to bottom, do it. And of course, floors, rugs, and both the interior and exterior of all cupboards will need to be cleaned, including the ceiling hood fan. Replace the hood fan filter if necessary.

    Check all the appliances that come with the house to make sure they’re in working order and if you can find them, set the manuals aside in a dedicated kitchen drawer. Test and put new batteries in smoke and carbon monoxide detectors and make sure you have working fire extinguishers for each floor.

    Get someone in to clean and maintain your furnace and air conditioning system and get someone to take a look at your hot water heater as well. Make sure your electrical panel is properly labeled and display emergency contact information for heating or plumbing emergencies on the interior of the electrical panel. Ensure your tenants know whether and how often they need to change the furnace filters and where they can find them.

    If all this seems overwhelming or you find you’re having frequent renter turnover, you might want to consider hiring a property management firm to deal with tenant complaints, repairs, and maintenance. It will cost you 10 to 15 percent of your total rental income, but it may buy you peace of mind. Interview several property managers and ask for references from tradespeople they use as well as other property owners. Getting your house ready for renters marks a new chapter for both you and your tenants to be. By making sure everything’s in good working order before you try to rent it out, you can hopefully attract the best possible tenants and ones who will treat your home as well or better than you.