Today, I’m so excited to have lovely Leigh Ann Houston from Your Teacher’s Lounge guest blogging as a part of my Journey to Home Owning blog series. Making the decision to rent or buy is the very first step in moving forward when it comes to working toward a new home. Without further a do, let’s learn about Leigh Ann’s home journey and what she has learned along the way…
Typically, I find myself writing about preschool crafts, strategies for igniting the literacy light in our children’s minds, or teacher hacks; however, I currently find myself in quasi-unchartered waters (writing about military housing decisions) and I’m overwhelmingly hopeful that I don’t drown (wish me luck).
I’m thrilled Christine gave me the opportunity to share what I’m learning with you!
You can get a taste of our military life in my post “Military kids are resilient but they weren’t born that way.” In short, our little Navy family has lived in seven homes (4 in the last 3 years) prior to our recent move to Hawaii. We own a home in Jacksonville, FL and have rented at every other location. Our bungalow in Jacksonville (in the incredible neighborhood of Riverside) is treated as an investment and we are fortunate to currently rent it to a wonderful Coast Guard family. Like alluded to earlier, we recently moved to Hawaii (I guess someone has to do it…ha ha). Furthermore, since base housing in Hawaii is some of the best in the entire military, we automatically assumed we would move on base. Of course our “plan” didn’t prove as easy as we were led to believe – upon arrival we discovered that there was significant wait to receive base housing. This “wait” has given John and me a moment to reflect and ponder our decision. And now that we are here and we’ve taken some time to research our options (by the way, I’m a tad pyscho when it comes to “researching” options, just ask John about my sleepless nights regarding our stroller purchase – the FBI would have offered me a job if they knew the about my “research” skills), we understand that the decision to live on base, rent out in town, or purchase a house is much more difficult and complicated than previously thought. The aim of this post is to simply offer, in my opinion, some of the pros and cons of renting out in town versus purchasing a house out in town.
Upside of Renting
- Little responsibility on the house – This is very appealing since my husband will be going on a deployment in about a year! Call it Murphy’s law or bad luck, but things tend to break as soon as the hubby leaves the country! When you’re renting, the dishwasher breaking is not your problem!
- Little upfront money – Instead of paying a down payment, renters traditionally have to pay for a security deposit which you should get back.
- Flexibility – You are only tied to the home as long as your lease dictates, and possibly even less. Military families can get out of their lease due to a deployment or a change in orders.
Downside of Renting
- No pain, no gain – Sure, you don’t have the risk of home buying but you also don’t have the big payout (you are, in fact, paying toward some other person’s big payout). You could eliminate or at least decrease this downside if you take the money you’re saving from renting and invest it.
- Little personalization – If you’re not a fan of the wallpaper, you’re stuck with it. Renters usually have little control over the ambiance of the home. You can combat this con buy personalizing what you can! Invest in furniture you love and hang your own pictures.
- No stability – The homeowner can raise the rent as soon as your lease is up or worse, decide to sell at any point which would leave you looking for a new place to live.
Upside of Home-Owning
- Building a nest egg – Every mortgage payment is getting you closer and closer to a huge payout! You may be paying your mortgage yourself or you may even be renting it out and having a renter pay your mortgage for you.
- Fixed payments – Assuming you have a fixed mortgage, the mortgage payment will not go up until it is paid off. Unlike rent that can change yearly, your mortgage payment is what it is. This could be very beneficial if you are comfortable with your payment today…it should be under budget within just a few years if your salary increases!
- Ownership -I didn’t know how important this was until it was taken away from me. I thought I loved our Jacksonville bungalow because it was in a fantastic neighborhood, walking distance to coffee shops, antique stores, and the school I taught at but there was more to it; I loved living in a place that was OURS. I liked that I could change something if I didn’t like it. I took a lot of pride in my home and knowing it was ours.
Downside of Home-Owning
- Risky – We all hope our homes will appreciate, and over a long period of time, it most surely will. The first decade is hopeful but not certain and anyone who bought around when we did (2006) would understand that! Our home, like almost every other one in the country took a very big hit. Over the next few decades, it will, most likely, prove to be a financial gain but it’s quite frustrating to owe more on our house than it is currently worth!
- The home you want may not be the home you can afford – Notice I didn’t say what you can qualify for. You obviously cannot simply buy any house that you qualify for. You need to make sure you can afford the mortgage payment (in addition to the taxes and repair fees) today and for years to come. Is your job and income stable? If not, buying may not be for you.
- Upfront and available money – You usually have to have a down payment at the closing. This is typically 20% but there are mortgages out there that require less. You also need money available for repairs…it’s not a question of if that refrigerator will go out, it’s a question of when!
- Stability – This is both an upside but possible a downside also. It’s nice having a stable home but this does allow for a lot less flexibility. Your boss (or the Navy) offers you an amazing position in another location? You may not be in the position to sell your house quickly. If anyone reading this moves like we do, you run the risk of not finding renters, or at least not finding good ones. A house ties you down!
Which is best for you?
The answer has been different for us during different chapters of our life together and on how the economy currently is. My brother owns a home in a suburb of Chicago and has been very happy renting it out in the past. He is currently having a hard time finding renters since the economy is getting better…more people are buying and less are renting! We are currently exploring rental properties, going to open houses, meeting with our realtor all in hopes of finding the perfect home! Wish us luck and I will definitely be visiting xtine danielle for some more guidance!