There are many reasons why people choose to rent their next home in suburban Boston or other areas. Generally speaking, it may be best to rent if you only plan on living in the area for the next few years. Renting also allows you to pass the responsibility of costly home repairs on to your landlord.

Below are just a few of the many questions that I suggest you ask before signing the lease:

1. How much of a security deposit can my landlord charge and what can it be used for?
2. What if I suddenly have to terminate my lease and need to move earlier then expected?
3. What will I be financially responsible for?
4. Am I a Tenant with a Lease or a Tenant at Will?
5. What’s the difference and do my legal rights vary?
6. I paid my rent late and my landlord charged me a late fee. Are late fees legal?

For more information and guidance on what you should know before renting your next home, please feel free to contact me. I will be happy to share my experiences and expertise while assisting you in finding your perfect rental home.  Click on the Home Search button to the right to view available rentals in the greater Boston area.

Renting

•·       When the lease is up, you can just move.
•·       Not gaining equity, but not losing it either.
•·       Less work for you to maintain the rental.
•·       Limited ability to personalize your living space.
•·       More fixed cost for the term of your lease.
•·       No tax advantages for renting, only for your landlord!!

Buying

•·       There are tax advantages for owning a home
•·       Variable cost.
•·       Over time the mortgage balance decreases and the equity increases.
•·       The ability to remodel and decorate as you please.
•·       Homeownership enhances your overall financial credibility.
•·       Pride of homeownership!!

                                                               So what is right for you?

                                   How long do you want to continue to pay your landlord's mortgage?

Call me today, 781-710-5440, and we can find out what is best for you!!

When to Buy, When to Rent

The decision to stop renting and to buy a home is traditionally made at the point at which the renter has decided to stay in a location for a few years and has saved up enough money for a down payment. But now, some renters are jumping into homeownership, even though the cost of owning is several times more than the rent they are paying. Perhaps they are anxious that the prospect of a continued rise in home prices and mortgage rates will put homeownership out of their reach.

It may be fine for them to buy a house, as long as it’s affordable. But when housing costs exceed 35 percent of gross income, and a prospective buyer has to make unsustainable budget cuts to make house payments, this becomes a problem.

The reality is that everyone pays rent, either to a landlord or to a bank for the use of its money. Everyone also buys houses, either for the landlords or for themselves.

Advantages of Owning Your Home:

• Build Equity through mortgage pay-down and price appreciation. Of course, if you have an interest-only mortgage and your home value falls before you sell, you can lose equity.
• Make Changes. Since you own it, you can remodel, paint and make any changes that make a house your home.
• Tax Breaks. For most people, owning a home means saving money on taxes because they can deduct the costs of mortgage interest and property taxes. Of course, these tax breaks can be offset by increased costs for maintenance, utilities and insurance.

Disadvantages of Owning Your Own Home:

• Rising Costs
• Responsibility for Maintenance
• Having to Sell if you want to move or have to relocate

Generally, owning a home makes sense for people who plan to stay put for several years, can afford all the costs associated with home ownership, and can accept the responsibility for maintenance and upkeep.

Advantages of Renting

• Predictable Costs. You’ll know what the rent costs will be for the term of the lease.
• Flexibility. You can move with little or no cost or hassle, particularly when your lease is up.
• No Maintenance. The upkeep and maintenance is the landlord's responsibility.

Disadvantages of Renting

• No Equity Buildup
• No Tax Savings
• You Can Only Make limited changes or alterations.

Generally, renting makes sense for people who may want to move in a few years, need flexibility, don’t have cash to buy or don’t have secure employment.

Buying Vs. Renting: When To Break Even

But most people assume that it’s always to their advantage to buy a home, which is usually true, but not always. When considering whether to rent or buy a home, you need to look at more than just your mortgage payment.

Consider the following example: Say your current rent is $1,200 per month. You are considering buying a home for $275,000. After using cash for a down payment and closing costs, you will need to get a mortgage for $253,000 at a 6 percent interest rate. Your monthly payments for a mortgage, property taxes and insurance will be about $2,084, which is $884 more than your current rent payment.

After taking into account the savings in taxes (due to mortgage interest and property tax deductions) and the equity build-up from paying down mortgage debt, the following is a range of the number of years to break even at various home price appreciation rates:

Home Appreciation          Number of Year to Break Even

    5 percent          ....................2.1 years
    3 percent            ................  4.1 years
     2 percent            ................ 7.2 years

Clearly, the rate of home price appreciation after you buy has a big impact on the time required to break even, after which buying a home will be a better financial option than renting. The take-away from this analysis is that if you don’t plan to stay in your home for more than four to seven years, renting may be a better option for you. 

Visit my mortgage calculator to see what your monthly payments may look like http://www.lexingtonareahouses.com/calculator.asp The links on the right offer useful information, and a free search of the MLS for rentals or homes for sale in suburban Boston, so you can keep up with housing prices.  Also, contact me with any questions you may have about making this big decision.