Professional Athlete Real Estate Buying vs Leasing
Professional Athlete Real Estate Buying vs Leasing: WHICH IS BETTER?
The single greatest investment the average American will make is the purchase of a home. Professional Athlete Real Estate Buying vs Leasing. Not only is it a substantial financial investment, but it also carries with it an emotional attachment. It is no wonder, then, that the decision to buy is one that is undertaken with the utmost of caution and yes, concern.
There is no doubt that current interest rates make this an attractive time to buy, but interest rates should never be the only determining factor. Every would-be buyer should ask the following questions before making a decision:
- How long will I be living in the new house? If one plans on staying in one place for a number of years, then buying makes great sense since you will be locked into a fixed interest rate.
- Can I afford to buy? In other words, can you afford the down payment and monthly mortgage payments?
- What are the costs of buying? Remember that the down payment is not the only cost associated with purchasing a home. Add to the down payment the following: appraisal fees, credit reports, document preparation, escrow fees, home inspections, homeowners insurance, property taxes, points, etc.
- Do I have good credit?
- What are my future plans? Do you plan on having a large family? If so, will the home you are considering be large enough? Do you see yourself there in ten years? Twenty? What does the future of your employment situation look like?
Yes, prices are down, but they are also on the rise. Yes, interest rates are currently hovering near 4.4%, but they, too, will rise in the future. Yes, the economy is slowly improving, but how long it will take to be declared “recovered” is anyone’s guess.
So much uncertainty! So should you rent or own a home? That is the question, and there is no definitive right or wrong answer. There are pros and cons to both sides of the argument, and each individual buyer needs to look at those pros and cons before deciding.
PROS OF RENTING
- No home maintenance required. Repairs to the rental are the obligation of the owner, and renters need not worry about the skyrocketing cost of repairs.
- Much easier to move should you need to do so; give 30-day notice and leave.
- Avoid possible decline in market price. As home owners discovered six years ago, the state of the economy can give or it can take away.
CONS OF RENTING
- Rents can be increased and in fact are increasing in many areas. Unless your rental agreement forbids a rate increase, you can find a substantial increase when your current rental agreement lapses.
- Renting is not an investment and you do not build equity. Do you really want to spend $1000 per month and have nothing to show for it?
- There are no tax benefits to renting. This is a huge factor come tax time every April.
- Painting and remodeling are only allowed if the owner approves them. In other words, what you see is what you get unless you have a very benevolent landlord.
PROS OF OWNING
- It is most definitely an investment and you do build equity if the economy is sound.
- Many tax incentives for homeowners. You can literally save thousands of dollars on taxes, all the while growing equity.
- House payments stay stable on a fixed mortgage loan. No matter what is happening with the market, you can rest assured that your mortgage payment will remain the same.
- Your home can be used as a rental in years to come, further adding to your investment.
- Decorate as you choose.
- Become part of a community when you are a homeowner. There is a sense of community when you purchase a home, and homeowners help each other protect that community so that all benefit.
CONS OF OWNING
- You pay for your own maintenance as a homeowner. This is a consideration many first-time buyers do not give thought to, but anyone who has had to replace a roof understands the importance of this.
- Selling your home quickly does not always happen. Depending on where you live, a home may turn over and re-sell in 30 days or worst-case scenario, 30 months.
- You pay property taxes. Remember that as your home rises in value so too do the property taxes. Your interest rate may be fixed but not so your property taxes.
- Your home could lose value. The biggest risk of all, of course, and a reality a mere six years ago. If the economy is unstable or depressed, the value of property will be greatly affected.
Yes, without a doubt this is an important decision. As a real estate expert I can tell you that this is the best time to buy that we have seen in many, many years. Interest rates are still low and values are increasing, and there are some very attractive deals on the market right now. The market is slowly recovering, and if you are considering buying and you have the ability to do so, this might just be the time to take the plunge.
Ikem Chukumerije is the CEO of SportsRelocation.com. Sports Relocation, Inc assist players/coaches of all professional sports leagues including the NBA, WNBA, NFL, MLB, NHL, and entertainers relocate nationwide by servicing their Real Estate & Relocation needs. Ikem Chukumerije is licensed to practice real estate in New York, California, Nevada, & Florida. SportsRelocation.com operates nationwide and provides our elite services in all 50 states and internationally.