There is a hot debate in the real estate industry: is it better to buy a home or rent? As more people choose to rent high-end homes in Richmond, Virginia, rather than purchase them, the debate is hotter than ever.
Decades ago, it was the American Dream to own a home. However, as society changed, people soon saw another option that could be more affordable and match their lifestyle better.
If you’re trying to decide whether to rent or buy a home in Richmond, we’re here to tell you the pros and cons of both to help you make a better-informed decision.
Consider Your Overall Finances
Purchasing a home is the biggest investment most people ever make in their lives. It isn’t something you can do at the drop of a hat. You have to consider your overall finances to be sure you’re making the right decision.
Before purchasing a home, you’ll have to consider many factors before you sign your name on the deed. You’ll have to have a good credit score, for starters, since a mortgage lender determines whether or not you get a loan based on this.
You’ll also have to have a good amount of savings that you can use as your down payment on the house. Therefore, you’ll probably have to spend a couple of years saving this money.
Another detail lenders will examine before you buy a home is your debt-to-income ratio. If the ratio is off and they see you can’t afford to take on more debt, they can refuse to give you a mortgage.
Lastly, you must also consider the additional costs of owning a home, but we’ll go over this more a bit later.
There is much less of a process when renters apply to live in a rental property in Richmond. Usually, the landlord or property management company will examine their credit score, income, and a background check.
If approved, renters will just have to pay their security deposit, the monthly rent, and utilities that aren’t included. There is much less preparation than if you’re buying a high-end property.
Nothing in life is free, which is especially true in real estate. It can feel like everything has some cost associated with it.
During the process of buying a home, buyers can expect many upfront fees before they can actually move into the property.
These fees include loan origination, real estate agent fees, closing costs, transfer taxes, and many more—all of this on top of the actual down payment and price of the home.
Before moving into a rental property in Richmond, renters have just a couple of upfront costs that shouldn’t put them back too much.
These expenses include an application fee, security deposit, and a renters insurance policy if required. They will also have to pay the first and sometimes last month’s rent before they can move in.
Taking care of a property isn’t easy. It takes a lot of time, money and effort to keep your home well-maintained.
When you own a home, you are fully responsible for keeping up with the maintenance and repairs. If there’s an unexpected leak or an appliance breaks, you have to find the money to fix it.
Since this is the case, many homeowners keep an emergency maintenance fund just in case there are big repairs that need to be made.
Tenants don’t often have to worry about making repairs or maintaining the property where they live. Instead, it’s the landlord’s responsibility to make repairs and pay for them.
With just a simple text or call to a landlord or property management company, they can have their repair made in a timely manner without lifting a finger.
Long Term Plans
It’s important to always plan for the future. You’re probably familiar with the question, “Where do you see yourself in five years?” This is important to ask yourself if you’re considering whether to buy or rent a home.
Owning a home means you should plan to live in that home for the next five to ten years, if not more. It’s a hassle to sell a house and have to buy another if you decide to relocate every few years.
Before buying a home, make sure you like the area and know that you’re going to commit to staying in that town. If you aren’t sure, then you should rent as you decide what the future holds.
Renters have the freedom to move around as they wish, respectively. They only have to commit to living in a property for a year or two before they can decide to move to another neighborhood or city altogether.
We always hear about building equity when owning a home. This is especially important when you want to sell the property. However, should it be your deciding factor?
With each payment of their mortgage, homeowners build equity and own a little more of their home each month. This means when they are ready to sell, they can pocket more cash than if they didn’t build equity.
As a renter, you won’t have the chance to build equity and own a property loan-free. Instead, your rent is probably going towards someone else’s mortgage for them to build equity in the property.
Another way to look at this is that your money isn’t working towards anything except putting a roof over your head.
Property Features & Aesthetics
Everyone’s home reflects their lifestyle and personality, especially when it comes to high-end properties in Richmond. However, this poses another factor when deciding whether or buy or rent.
Those who own a home have the freedom to do what they want with their home’s features and aesthetics. If they choose to build a patio or knock down a wall to enlarge a room, they can.
Homeowners have a chance to really make their home feel like home.
Renters do not have the freedom to make changes to the property. They must be happy with what they can find as it is. If they wish to adjust it, they need to get permission from the landlord – even if it’s just painting a wall.
Do You Own a High-End Home in Richmond?
Maybe you already own a high-end home in Richmond and are considering renting it to tenants. Well, now is the best time to do it! Rents for high-end properties are increasing by $200 to $300 a month, which means more money in your pocket.
If you don’t have experience as a landlord and don’t necessarily want the responsibility of dealing with tenants, consider working with a property management company.
Hylton & Company is the area’s leading property management company, and we’re happy to manage and maintain your Richmond property with the utmost care.
From acquiring tenants to scheduling repairs to preparing your property for the next tenants, not only can we maximize your profits, but we also take the stress out of being a landlord.
Contact us to discuss how we can help you get tenants in your high-end Richmond property today!