Should you rent…or should you buy?  A question that has crossed everyone’s mind at one point, except….the answer is not always obvious, and choosing the wrong option could actually burn a hold in your pocket in ways you never thought possible.  So, let’s break down each option and we’re starting right now.

 

Renting can actually be a good idea when moving to a new state.  There is flexibility in renting if you’re unsure of the exact area you want to be in, or maybe you’re strapped for cash and don’t have the money needed for upfront cash for purchasing a home.  If you’re considering moving to the Central MS area, we have several great options.  Depending on your needs and wants, you might want to look in the Brandon area.  There are lots of great apartment complexes to choose from, and if you decide after a year that you like the Madison area better, then you can take your time and find a home to purchase.  Or, maybe you decide you don’t like it, you can easily leave after the lease is up and find a new town to call home.  OR maybe you know that you only plan to stay for a year or two, renting would most likely be a better option.   I’ve moved cross country once, and we couldn’t decide between renting or buying and I’m so glad I rented first because the area we first chose was not the best fit for us.  Luckily, we were able to sign a 6-month lease, so our time in that rental was short lived and we moved to a much better part of town when our lease was finished.  Apartments in our area rent for around $1,500-$2,000 a month for a 2-bedroom apartment in a nice part of town.  There are homes for rent also.  Those range from $2,000-$4,000 a month depending on size and neighborhood. By the way, I discovered that you could find homes for rent on apartments.com in our area while I was doing some research for this video.  Some people find it difficult to find a home to rent in our area because there aren’t many and most real estate agents don’t work rentals in our market.  So, it’s good to know that you can go to aparments.com and find both homes and apartments in one spot.   If you’ve seen any of my videos on living in Madison, MS, you might know that there are NO apartment complexes in the City of Madison….that’s b/c our long standing Mayor has kept them away.  So, if you are looking to move to Madison because of the great schools, you might be able to find a home to rent but be prepared to pay more than you think.  And, if you think your credit score is keeping you from buying, remember that most rental companies and landlords will also be scrubbing your credit, so if your credit is sub-par, you might want to get to work on that regardless!

 

Next up, let’s talk about buying in Central MS.  Looking at our 2 most popular cities, Madison, and Brandon over the last 6 months.  The median home price in Brandon was $291k, which will buy you about 2,000 sq feet on average at about $146 psf…And in Madison, the median home price was $388k for 2,250 sq feet at $172 psf.  So, let’s say you put 10% down on a $350,000 home, at 7% interest, your monthly principal and interest would be $2,100, which is about what you’d be paying in rent for a 3-bedroom home once you add about $300 per month for taxes and insurance.  But, assuming you keep your house for at least 5 years, the home’s value is increasing each year, and so would be your rent…but your mortgage stays the same.  If you’re young and working, hopefully your pay is also increasing each year.  In theory, if you buy your first home in your mid to late 20’s and do a 30-year mortgage, you should have it paid off by the time you retire.  Whereas, if you rent and never purchase a home, you’ll literally be paying rent until you die.  I bought my first house when I was 27.  I put it on a 30-year mortgage and put the minimum 3.5% down, since I was pretty much broke and didn’t have help from family. When I sold it 5 years later, I used the equity to make a nice down payment, but instead of doing another 30-year mortgage, I shortened by new home to 20 years.  Then I did the same thing about 8 years later and shortened that new home to a 15-year mortgage (it was a much bigger “forever home” purchase).  So, now that home will be paid free and clear in a few years.  Don’t repeat the mistake some people make and keep doing a 30-year mortgage every time you move.  You’ll never have significant equity that way and it will keep you working to pay the mortgage and who wants to do that?!!?

 

Let’s talk about home repairs and maintenance for a moment.  Because this is a big factor that weighs in on why some people don’t want to own a home, they don’t want to be outside mowing the grass every weekend, or they don’t want to worry when the air conditioning goes out and having the money to fix it.  My suggestion is to put a very small amount away each month to prepare for unexpected costs.  You can also buy a home warranty, which is basically an insurance program for home maintenance items.  And if the thought of spending hours each week in the summer taking care of a lawn makes you shudder, then consider a home with a zero-lot line or a tiny yard, like a patio home, we have plenty of those type homes in our area.  By the way, if you’re a first-time home buyer, we are starting to see sellers paying some closing costs again, so if down payment is what’s keeping you from purchasing, reach out to us, because there are definitely options!  

 

Next, let’s talk about man’s best friend!  A lot of people forget to take their pets into consideration when looking for rentals, which is crazy to me since 66% of Americans have a pet!  Most, if not all, rentals will charge a higher deposit and/or additional pet rental each month for your fur baby.  And, of course, some won’t allow pets at all, or will have restrictions on the types and size of dogs that are allowed.  So, make sure you keep that in the back of your mind if you have a dog…like me!  The freedom of owning your own home and getting to make the rules as you see fit is what makes owning a home worth it.

 

So, that’s it for today!  Make sure you check out our website at taylorgroupms.com, it has ALL of the MLS listings on it and it’s updated every 10 minutes.  If you see a home you want to tour, just reach out to us.  If you’re looking for a local lender, let me know, I can help with that too! 

 

Taylor Realty Group

601-613-9100