In today’s Ask the Real Estate Agent segment, I have got a question that has come up recently. Multiple buyers have asked should they buy a home now if they think they might move in a year or so. A lot of times they think maybe they’re going to have a job transfer, or go back to school etc., so they, are questioning, should they buy now or should they just keep on renting.
Should I Buy Now if I’m Planning a Move Next Year?
A lot of people who face that question end up staying for two, three, and all of a sudden it is five years later. The rents keep going up and up and up, your rent on the same unit you’ve had for years is now hundreds of dollars more per month.
Your Rental Price Increases, Your Mortgage Does Not
Just like apartments, home prices go up and up and up. As opposed to your rent going up your payment stays the same (with the exception of possibly HOA fees, taxes, utilities) and at the end of the day, they lose out on a lot of value. I’m not saying that for everyone the answer is, definitely, you should buy now if you think you might move sooner rather than later.
BUT – if you do buy now, you’re going to lock in your cost of living, lock in your housing payment, and be accumulating equity. You’re going to get the benefit of tax deductions on your mortgage interest and on your real estate taxes. You’re going to get the benefit from leveraged appreciation because you’re typically taking out a loan for 80% or more of the home, only putting down 20%, but you’re capturing 100% of the appreciation.
Sometimes, if you do have to move, it is hard to overcome some of the transaction costs if the time frame is too short, but you have a lot of options. Just because you buy a home and you do get that job transfer, or do decide to go back to school, it doesn’t mean you have to sell right away.
Buying a House Provide More Options
The nice thing about real estate is that you’ve got a ton of options. You could sell it, and in our market we can get your home sold in 30 days or less. You could also lease the home. With rentals, you can rent to an individual or family on a month to month, annual, or longer term basis. You could also lease each room separately and potentially bring in higher monthly rates but at the inconvenience of you having to do a little more marketing to find tenants more often.
It’s an older home you’re buying, you could do an improvement and then try to sell it. You’ve seen the HGTV shows, flipping is a real thing you can do and we are happy to put you in touch with the right lenders and builders to get that done.
The great thing about owning is you’ve got way more flexibility than renting. Don’t be a little skittish just because you think there is the possibility that you could move in a year or two. The pros usually outweigh the cons in this situation. We are happy to provide a complimentary, zero pressure analysis of your situation and let you know the pros and cons of each option. Just send us an email at [email protected] or call/text 571-969-7653.