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Beachside Yoga: Thorn Park Miami Beach Group

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Rent Or Buy A Home Pros And Cons

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Renting can be a very predictable expense. You know what your costs are upfront and can plan accordingly. On the other hand, if you enjoy a lavish lifestyle, you may find renting to be more expensive than owning a home, even if there are repairs and regular maintenance you have to make with purchasing real estate.

Although money plays the most important role in deciding whether to buy or rent a home, it is not just about the money. There are many other factors that play a part in deciding which to choose. How long you plan to live in a certain location, your plans for the future, your career goals, etc., all play a role in your decision.

The benefits of home ownership come with costs and limitations. For some, renting may be a better option. Consider the pros and cons of buying a house as you think through the process and before you make a decision. You can also read our homeownership guide to help you through your process.

Another option is to seek a rent-to-own situation in which you sign a rental agreement for a short period (12, 18 or 24 months) with an option to purchase the property at the conclusion of the lease. In some cases, in exchange for a decision to buy, landlords will agree to apply some of your previous rent payments toward a down payment on the home or give you immediate equity.

Think of it this way: Instead of paying your monthly rent to a landlord or corporation, you can start buying into your own home equity. Consider your house a long-term piggy bank. As you build equity, your home value increases. You can also cash-out refinance a portion of your home equity if your family falls into debt or the kids need help financing their college degrees.

Unlike renting, or even owning condos or townhomes, buying a house lets you have total control over your home. You may not need to ask permission from a homeowners association (HOA) board or landlord to make a home renovation to match your lifestyle. No more limits on pets or toeing the line on noise restrictions with the apartment next door. Start a garden bed if you want to and adopt a litter of kittens. The only rules you need to follow are codified laws and those set forth by your lender or HOA, if there is one.

According to the U.S. Census (Table A-4), homeowners are more than three times less likely to move in a given year compared to renters. That same study shows that about 4.9% of homeowners moved between 2020 to 2021, compared with 16% of renters. Of course, the reason for those moves varies from job relocation to unsustainable increases in rent costs. Regardless, according to the findings from the National Association of REALTORS, communities that have residents settled in for the long haul often have stronger social ties, civic engagement and social capital.

It used to be that a 20% down payment was the biggest barrier for renters to become homeowners. The industry has changed so drastically that the 20% down payment is widely regarded as a myth. Today, you can qualify for a mortgage with as little as 3% down. There are even a couple of government-backed zero-down mortgages that require no down payment. Granted, the lower your down payment, the higher your monthly interest rate and monthly mortgage insurance payments, but it gets your foot through the literal door of your first home.

You need to be prepared to metaphorically root yourself to your home for at least 5 years if you expect to make any capital from selling your home. That said, you may have the option to lease the home to head out on short-term trips. Regardless, expect a more complicated moving process than moving out of a rental.

This is also known as an option fee or option consideration and is a non-refundable, upfront payment which locks in the price of the home and ensures that the tenant has the first option (not obligation) to purchase the home on or before the agreed-upon date.

The contract will set a fixed purchase price of the home. This number might be a little higher than c


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