If you are like most people in the current real estate market, you are more than likely trying to choose if it is best for you to buy or rent a house in Birmingham. Rest assured, you are definitely not alone. Over the last few years, the real estate market in Birmingham, AL and beyond has been turbulent at best, and even though recovery is underway, the Alabama real estate market as a whole is still lagging behind national trends.
Let’s take a look at buying vs. renting a home.
Making the Decision
Before you can decide whether it is best for you to rent or buy a home, you must first determine your plans. Consider the following questions when making the decision that is best for you and your situation:
How long do you plan to stay in the home?
What does the real estate market look like in the specific area in which you are looking to buy or rent?
How much are you looking to spend on rent/mortgage payments each month?
After you have the answers to these questions nailed down, it is easier to determine whether to rent or buy a home. You can also utilize a rent vs. buy calculator that can help you determine the finances behind the decision.
Renting a Home
If you are not planning to stay in the area in which you are considering purchasing a property for many years, then you are more than likely better off renting as opposed to buying. Although the real estate market is making progress toward recovery, the future of the Alabama real estate market is still a bit unstable. Due to the uncertainty, if you purchase a property today in hopes of selling it for a profit (or even to get your money back after closing costs) in a couple of years, there is definitely no guarantee that you will be able to sell the home without losing money.
There are several benefits to renting as opposed to buying, including flexibility, less up-front costs, and a built-in, landlord-sponsored maintenance program. On the other hand, you may end up paying more monthly when renting a property in comparison to mortgage payments for a home you choose to purchase.
Buying a Home
If you have a stable lifestyle (family status, job situation, etc.) and you are planning to stay in the area for a very long time, then buying may be a better option for you. The benefits for buying include a potential for a return on your investment (building equity), an ability to obtain lower monthly payments in comparison to renting the same home, and the ability to do what you please with your property (decorations, remodeling, etc.). On the other hand, when buying a home you are fully responsible for all maintenance (which can be costly), you often have to have money saved for a down payment, and when you decide to leave the property you have to sell the home to satisfy the home loan.
At the end of the day, when choosing to buy or rent a house in Birmingham, AL it comes down to understanding your current situation and determining which option is best for you and your needs.