ll archives: Renting vs. Buying in Atlanta: Which is Right for You?
By Hannah Goodman of Trulia Most young people will agree, the transition to adulthood is a scary one. In addition to the nine to five work grind, you are now responsible for bills, taxes, and big decisions like whether to rent or buy a home. The good news is that buying a home is currently 23 percent cheaper than renting nationwide for the millennial generation, according to Trulia. Interest rates are also still at historic lows, and buying is cheaper in 98 of the United States’ biggest metropolitan areas, so now is a great time to invest in Real Estate. However, buying a home can come with some drawbacks, here are some of the issues to consider.
A home comes with a lot of responsibilities, and for most young people who are just getting started in their lives and careers, settling down into a home and mortgage can be a an expensive and daunting prospect. In fact, one of the main reasons millennials prefer to rent is the upfront cost associated with purchasing a home. For instance, the median sales price for a home in Atlanta is currently $235,000, and according to Trulia, most millennials can only afford a 10 percent down payment. To put this into perspective, to purchase a $235,000 dollar home in Atlanta, potential home buyers would have to come up with at least $23,500 up-front, which doesn’t include the added costs of owning a new home like inspections, title fees, and closing costs.
Rentals, on the other hand, only require a security deposit, which is usually at most, equal to one or two months’ rent. The median rent per month in Atlanta is currently $1,245 a month, so on average, the upfront cost of a rental would be $2,490.
Another factor that impacts the decision to buy a home is a strong credit score, or lack thereof. Most young millennials have little to no credit history and those who do, tend to have lower scores because they haven’t had lines of credit long enough to establish high scores. While there is no real “Magic Number” to obtain a mortgage, if you are considering applying for a mortgage, you should aim for your credit score to be at least 660.
So, you’ve got your finances in order, secured a mortgage lender, and were lucky enough to find and secure your perfect place. Now all that’s left is to choose a moving day and prepare for all the fun and work that owning your new home will bring. Perhaps the most important thing to prepare for are the hidden costs of homeownership. Expect to pay more in interest, taxes and insurance in addition to the cost of the inevitable issues that will arise with your new home, from maintenance and repairs to remodeling and decoration costs. Also, be sure to consider the long term effects of any major changes you make to your living space. While renters usually don’t have to consider things like resale value and equity, both are important for new homeowners.
For those who do have financial capability, there are many perks that come with being a homeowner. Typically, buying a home is good investment, especially if you purchase in an up-and-coming area like Atlanta’s Historic West End. In most U.S. markets, monthly mortgage payments are cheaper than renting. Additionally, the opportunities for equity growth are large if you are willing to invest more money in upgrades to your space.
Home buying is an intimidating task, whatever your age, but it can seem especially overwhelming to a young person just starting out. However, with the right mindset, and proper research, the dream of owning a home is attainable for even the youngest potential buyer.