After some careful consideration, I'm carefully considering a rental property. If you've been following along for the past few weeks (months?) I have been searching, albeit casually, for a new place to hang my proverbial hat. If you have been searching along with me, you know that home prices have remained strong and rentals are not far behind. I'm very grateful that I have an awesome place to live and a roommate that has become a very close friend. That said, it's time to move on. I just haven't found the right place yet.
For today, I'd like to share a few thoughts about renting versus buying. This time, it's personal. One of my main hesitations with buying a home right now is my penchant for living either abroad or bouncing around this great country of ours. Since my business allows me to be "not home," I thought it would be fun to explore the world a bit. I have always wanted to live overseas and finding a way to explore the world is pretty high up on my list. While that is reason enough to not throw money down on a home, the prospect of co-habitating with my honey is also pretty high up on that list. But enough about me. Let's dig in.
This conversation cannot be had without discussing finances. If you are thinking about buying a home, the first thing you should be focused on is savings. Yes, the down payment is important. But, moreso than that is the ongoing expenses you will "discover" when you buy a home. "This is not to say that your home will be an ever-present drain on your finances," notes Badger Realty commercial agent, Daren Levitt "It is just important to plan for those inevitable, unforeseen expenses that arise," he continued. The furnace will stop "furnacing" at some point. The dryer will stop drying (ask me how I know!). It is important to have enough in reserves that you can cover your mortgage and expenses for about six months. The peace of mind that provides is truly priceless.
And since we mentioned it, we'll just tackle it here. The down payment is quite important for a couple reasons. Primarily, you simply can't purchase a home without some skin in the game. There are programs out there that help minimize the down payment percentage, but in the end you'll need some cash. There is also this pesky thing called PMI (private mortgage insurance) that arises if, in most cases, your equity in the home (read: down payment) is not at or above 20%. This simply means you'll be paying an additional percentage each month for "insurance" on your mortgage. Try your hardest to get that 20% ready to go.
The last (for today) financial consideration is your debt. It took me almost 10 years, but I have emerged from the life-sucking clutches of debt and vow to never look back. If you are still carrying around a load of debt (and statistics indicate that most of us are) it is beyond time to address it. Forget about avoiding PMI for the moment, you need to eliminate the monthly draw on your budget. If you really want out of debt, you'll do it. One of my favorite sayings is: "If you want something, you'll find a way. If you don't, you'll find an excuse." Stop making excuses and clean up your finances. I cannot tell you how amazing that freedom feels.
Moving away from money, let's talk location. Similar to what I noted above, if you have just moved to an area that you're not terribly familiar with, give yourself some time to get acquainted. I have lived in numerous places around New Hampshire and Maine and it always takes about a year to really understand a city and its multiple "regions." Sure, living in Lincoln, NH is great, beautiful and close to all things "mountains," but what about North Woodstock or even Thornton. The beauty of living (and cycling!) in an area for a few months is it gives you time to really explore the different areas and even the neighboring towns. It also helps you learn where you don't want to live and areas of town that you really want to avoid.
The same is true regarding your job or career. Much like my desire to be a traveling ninny, if you are unsure about your career, now is not the time to purchase a home. If you are looking to change careers or even gunning for a promotion, consider renting for a bit until the dust settles. The job could relocate you or you may learn that you can be fully remote (not that rare these days!). That sort of freedom can expand your "home" search well beyond the confines of your home city or state. In my rental search, I have found a number of landlords willing to rent for a six-month term. That is very desirable in my case and could be the perfect thing for you as well. Not having to commit to a full year could be just what the doctor ordered. You will never know if you don't ask.
Relocating to a new home, whether renting or buying, is a big undertaking and a big load of stress. I encourage you to give yourself some time to search and give yourself a bit of a break. This is a stressful time for each and every one of us. We're all just hoping to get beyond this virus and get back to a normal, healthy life. Do something nice for yourself today. Maybe take yourself outside and enjoy some trails and trees! Then get back to your search. You deserve the break.