Should You Continue To Rent OR Should You Buy a Home?

There is little doubt in my mind that at one time or another the question “should you continue to rent or should you buy a home” has crossed your mind.

I grew up in an apartment for the first 13.5 years of my life in a 5 story building in the Bronx, NY.  Back then I thought everyone lived in apartment bldgs. and only the rich owned homes.  What did I know as a kid.   I recall many winter days with no heat and no hot water.  Mom would heat water in large pots on the kitchen stove and then pour the water into the bathroom sink so my brother and I could wash up and brush our teeth before school.  And there were times, when we’d come home from school, still no heat or hot water, and mom would reheat water in pots on the stove to pour into the bath tub so everyone could take a bath.  Waiting for the landlord to get the boiler repaired would sometimes take days.   I don’t remember hearing footsteps overhead from the neighbors who lived above us, though I do recall overhearing conversations in the outer hallways, and the loud tv or hi-fi in the next door neighbors apartment blaring through the walls into our apartment.   On any day of the week walking up the stairs to our apartment I could tell you what foods were being cooked in apartment 1E, or whose mom was yelling at which kid on the 3rd floor, or whose clothes line just broke with their clothes hanging down alongside the bricks of the building on the 5th floor.  Very little was a secret when you lived in an apartment building.

In 1967 my parents purchased a home in Monmouth County, NJ thanks to my dad’s VA eligibility.   No longer did I have to share a bedroom with my brother though I honestly never minded sharing a room with him.  The only music I heard was coming from the stereo in our own home.  I didn’t hear neighbors next door or footsteps overhead.  I no longer had the smell of stuffed cabbage or Irish stew  in my nose.  Thanks to the  VA mortgage loan program  my parents had the opportunity to own their own home and become a part of a community of other first time home owners who had all relocated to the same community.  Pride of homeownership was blooming throughout the community.

When I got married in 1979, my husband and I both worked in Manhattan but didn’t want to move back to the city to live so we rented a 1BR apartment in Essex County, NJ.  Living room, bedroom, bathroom, tiny kitchen and small dining area was our $600/month aparment.  Laundry facilities were on the ground floor of our building, but I wasn’t excited about washing and drying my clothes in units used by others.  I was spoiled by having lived in a home!  The guy who lived above us worked the 4-12 shift so it was normal for him to have the tv blasting at 2AM.   The Property Manager (landlord) was a bear of a woman.  I dreaded having to knock on her door when an appliance broke down to request she advise her husband so he could fix it.  By year two, I wanted out of an apartment and into my own home.  I was annoyed that the rent was increased yearly and I began to view rent as a waste of my money.   Convincing my husband was a different story.  He had never owned his own home and whenever I mentioned “let’s go look at homes,” he saw nothing but dollar signs popping up in his mind.  Every night for 6 weeks straight we would sit with pencil and paper going over our expenses, savings, what money we needed to save for a down payment.   Finally, and I think only because he couldn’t deal with another day of my nagging,  he agreed it was time for us to find a house to call home.  Hallelujah!!   In a flash I set out to find a Realtor and every weekend thereafter we did nothing but preview homes until we found the one for us.   Fortunately, my husband was a Veteran and in 1983 when interest rates were through the roof (13.5%), we purchased our first home  for approximately 3% less  in interest thanks to the VA Loan.   This time I had no problem knocking on the property manager’s door to say, “it’s been great and we’re vacating the apartment in 2 months.”   We had to repaint all the rooms in the apartment back to a neutral color as per our lease, and we had to repair all the holes in the walls made from mirrors and pictures we had hung up.  That was a small price to pay to get out of our lease and into our new home.

Today, the cost of borrowing mortgage money is at an ALL TIME LOW.   If ever there was a time to consider purchasing a home, it is now.   The great part about home ownership is just that….You Own The Home.  No Landlord.  You make all the decisions.  You can decorate your home any which way you choose, paint the walls whatever color strikes your fancy.  Play your music as loud as you want.  You can  own  1 dog, 2 cats and 6 birds if you want to.

When you own your own home, any money you put into it is an investment in yourself.  Whether you renovate your home by adding an extra room, install new kitchen cabinets, or remodel a bathroom you are spending the money you worked hard to earn on yourself, and at the same time you are building equity in your home.

You don’t have to settle for where you live.  You can select the right home for you from different communities, home styles and price ranges.  When you become a part of a community, you will take pride in the neighborhood you live in and together with your neighbors you will help build a safe and friendly community.

You won’t have to guess at how much the next yearly rent increase will be because you will be paying a fixed mortgage payment each and every month for the term of your loan whether it is a 15 yr loan, 20 yr loan or a 30 yr loan.  No surprise expense there!  At tax time you can deduct mortgage interest, property taxes and some other costs involved in the purchase of your home.   There are no federal income tax deductions when you rent.

Unlike rent payments which bring you no benefit,  your monthly mortgage payments will build equity in your home.   The more you pay down your mortgage, the more equity you will have in your home.  When it’s time to sell you can make up to $250,000 in cash without having to pay any federal taxes on the profit.  Owning a home can be a great savings plan!  No savings plan exists in renting.

So again, the question needs to be asked.  Should you continue to rent OR should you buy a home?  There’s only one way to find out.  Contact a local Realtor who will guide you through the home buying process and who can put you in touch with local mortgage lenders who will run your credit to determine 1) how much home you can afford to invest in and 2) which loan program is the best fit for you.   Stop tossing your money out the window on rent, and take the first step to owning a home.   With the large number of homes for sale and the low interest rates, no doubt there’s a home sitting there waiting for you to make it a home.