Renting versus Owning in the Bronx?
This question comes up quite often. Sadly most people believe that owning a home is far out of their reach. So instead of making an investment in a home, the vast majority of Bronxites rent.
Renting is great for some people but home ownership is still the dream that people wish would come true. So let’s chat about what makes renting good and what makes home ownership good and then you can decide which is best for you.
The Bronx is home to some of the most affordable rentals in the city of New York. Affordable housing has been a top priority for government officials looking to ensure that people can afford to live in the Borough they love.
- No long term commitment. Sometimes people like having the ability of moving whenever they want. Especially if they don’t anticipate on living in the home for more than a year or two.
- Low Cost of entry. In some places you can rent a home for only 1 month rent and 1 month security.
- Low Credit Score. If you are in the process of rebuilding your credit, then renting might be a good option.
- No tax benefits. When you own a home you can deduct property taxes and mortgage interest. In some cases this makes your monthly cost less to own than to rent.
- No equity build up. Real Estate has been a tremendous wealth builder for so many people. Example. You buy your first home, live in it for a few years, then sell and use your equity to buy another larger home and repeat the process enough times and you now have a small family fortune. Renting doesn’t allow you that opportunity.
- Your land lord. At the end of the day when you rent, someone else actually owns your home. In some cases they can decide not to renew your lease. Of course there are rules that apply with evictions but did you know it is easier to evict a tenant than to foreclose on a homeowner?
Now if you have been following my blog, you know very well that I promote home ownership big time. Why? (You’re thinking duh, because you are a Realtor and that’s your job), well actually my job is to help both Renters and Home owners. My job is to help people achieve their Real Estate Goals and that is different for everyone.
The reason I promote home ownership is because owning property has been one of the greatest ways of developing individual wealth and family wealth. Yes, the market has shifted for the past few years. Guess what, this has happened before and it will happen again at some point. The fact is that people who buy a home today have a greater chance of achieving wealth than at most points in history. Here is why.
- Home prices are EXTREMELY LOW. Homes are selling at significant discounts in comparison to 6 years ago.
- Interest Rates are EXTREMELY LOW. With today’s rate hovering below 4%, now’s the time to dust off your savings and make a purchase.
- Tax Benefits. Unlike renting, you get to deduct mortgage interest and property taxes from your yearly taxes.
- Wealth Creation. People have been fighting over land since the beginning of time. There is a reason for that. It’s valuable.
- Estate Planning. You can pass along property to your next of kin. You can’t do that with renting.
I can go on and on but ultimately owning a home is a wise decision. Remember, your home is your castle.
Owning a home in the Bronx is not that hard. Think about this. What if you could buy a home with only 3.5% down and pay no closing costs? This is possible with government backed FHA Loans. Speak to your lender about your lending options. In this example, if you were looking to buy a home for $350,000 you would only need $12,250 as a down payment with an FHA backed loan. You can also borrow money from friends and family, 401K’s, Pensions and a lot of other places to come up with the down payment.
Now, if you aren’t ready to own today, then start with a plan.
- Save for a down payment. I know we all fall victim to Micro Spending which means a dollar spent here and there equals no savings. So it is wise to open a savings account that is not linked to your debit card and have a portion of your check direct deposited into this account. Watch how fast you can save.
- Check your credit score. Make sure you have good credit or a plan to repair your credit.
- Casually look at homes on the market. You can search our home site here → Bronx Homes for Sale
With this information, owning a home is a Dream that can come true. So yes Renting is a good option for some but owning is the best option for most.