Is It Better to Rent or Buy a Home in Raleigh?
Raleigh is both the second largest city and the capital of North Carolina. Although Raleigh is a very old city, it is also an example of one of the early planned cities that cropped up during the latter half of the 18th and first half of the 19th century throughout the eastern half of the United States. Today, Raleigh is a thriving city that is home to about half a million residents. Raleigh homes offer old world charm for homeowners and renters. If you are planning to relocate to Raleigh, your first decision should be whether buying Raleigh real estate is your best option or whether renting works better for your needs and circumstances. Ultimately, only you can make the decision; however, there are a number of factors that you may wish to take into consideration when making your decision.
Costs of Buying a Home
An important consideration in your decision should be the cost of buying Raleigh real estate versus the costs associated with renting Raleigh homes. Buying a home comes with significant upfront and yearly costs. You will likely need a down payment ranging from 3.5 percent to as much as 20 percent of the total purchase price. In addition, there are closing costs that can add up fast. On a yearly basis, you will have maintenance and upkeep costs, taxes, and homeowner’s association fees when applicable. Renting a home also comes with upfront costs such as first and last month’s rent and a security deposit in most cases. You may even be asked to pay for renter’s insurance on a yearly basis. When you leave your home, you will probably incur additional costs as a homeowner, whereas you might be able to have your security deposit returned to you as a renter.
Benefits of Owning a Home
Although buying Raleigh real estate typically comes with higher upfront and yearly costs, there are many benefits that may outweigh those costs. From a financial perspective, you are gaining equity in your home each month that you make your mortgage payment instead of paying off someone else’s mortgage. In addition, as a homeowner you have the freedom to make changes to the property that allow you to make it feel more like home whereas a renter is usually not allowed to do more than change the color of the walls.
Before you start looking at Raleigh homes for sale, be sure that you are able to get approved for a mortgage. A credit score of at least about 650 will be needed for government back financing. Conventional loans typically require a score of around 720 or higher. In addition, you will need to provide proof of a stable employment history as well as enough income to be able to handle the monthly mortgage, taxes, and insurance payment. If you are not in a position to obtain financing at this point in your life, renting may be a better option while you work on whatever area needs improvement in order to qualify for a mortgage loan.
Along with financial considerations, consider how committed you are to the idea of being a homeowner. While most people enjoy the everyday tasks associated with homeownership, not all do. If you prefer to have someone else be responsible for maintenance and upkeep, for example, then renting may be a better option for you.
Long Term Plans/Goals
Even if you qualify for a mortgage, there are still reasons why renting may be a better route to take than buying Raleigh real estate for some people. If you foresee the need to move again within the next three to five years, for example, it may not be cost-efficient to purchase a home because it may not appreciate enough in that time to even brake even after paying all of the upfront costs involved in the initial purchase.