Is this the market to rent or buy?

September 6th, 2008 • Buying, First Time Buyers, Ownership, Renters

REAL ESTATE
by Jim Coleman, REALTOR®
TO RENT OR TO BUY IS A SERIOUS QUESTION FOR THIS MARKET
There is no question that timing, economic factors, financing options and inventory of this market prompt a critical question for many consumers: Do I rent or is now the time to buy? There are some fundamental factors that need to be identified and addressed. Some of them are basic and must be answered regardless of the market.
The first thing to identify is how long you expect to remain in the home after purchasing and occupying if the purchase will be a primary residence. There have been some customary guidelines that typically suggest that one should not buy unless it is reasonably calculated that one will be in the property ownership at least two years or more. If one is in the property close to the average of about seven years, then there is usually very strong consideration for purchase. This matter points to the fact that there are costs associated with resale that need to be remembered and figured in to the evaluation.
Important considerations in favor of buying include the following: (1) Ownership of a primary residence offers tax benefits with the deduction of payments of mortgage interest and real property tax. (2) Ownership has the right to modify, re-decorate or make changes to the physical property, structure or grounds, without having to obtain permission. (3) So long as ordinances, C.C. & R.'s or other applicable zoning regulations are adhered to, the owner has the freedom and the right to determine the use of the property.
What about concerns or reasons to not buy? (1) As the owner, you are the landlord and must take care of utilities and taxes, even when costs go up or when repairs are required. (2) As a renter, you are not responsible to deal with neighbor owners over such things as boundary issues, disputes about parking or trees overhanging the fence, or matters relative to compliance with municipal ordinance requirements pertaining to the property.
Today there is a lot of talk about "rent to own" or "lease with option to buy." In this market, there are many seller/property owners willing to consider this possibility. While sellers have concerns about the security of the property and remaining financially sound with the lender, they are often desperately in search for assistance to make the payment. This is where the door of opportunity opens for the renter to be able to rent or lease and position oneself to buy when the timing and financial wherewithal is established.
With the large inventory on the market today, with many motivated sellers, and with very low interest rates, a consumer with good credit, some down payment money, and following good investment strategy and purchasing counsel from a qualified real estate representative, now is an ideal time to seriously consider buying. As some say, the ducks are in a row, or the stars are lined up, in the favor of the buyers. Those who think they are smart enough to hold off or wait for the best deal or prices to go lower, may find they missed the chance, for it is extremely uncertain to identify precisely where we are in the market. Economic reports are often at least six months off of the actual immediate status of a current market. Seek good counsel and make the move if it fits with your timing and buying game plan, you can afford it and it makes good business sense for you.
St. George REALTOR® Jim Coleman is Associate Broker and Partner/Owner of ERA Brokers Consolidated. He Specializes in Residential, Investment and Commercial Real Estate, holding National Designations of Accredited Buyers Representative (ABR), Certified Residential Specialist (CRS), Resort and Second Home Property Specialist (RSPS) and Seniors Real Estate Specialist (SRES). You can contact him by e-mail at Jim@RealtorJimC.com. Call: (435) 674-0600; or write: Jim Coleman, 201 East St. George Boulevard, St. George, Utah 84770. This and other columns are available at www.RealtorJimC.com/articles.

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