“Is it cheaper to own or rent a home?” There are benefits to each, but we’d like to give you some things to consider as you explore options in Richmond.

People have passionate opinions on whether it’s cheaper to own or rent a home. Some argue that renting is “throwing money away,” others say that the commitment of homeownership is a burden. Most people can agree that homeownership does help you establish a solid credit history and build equity over time. When considering the options in Richmond, it’s important to have all the facts.

πŸ€” Are You Able To Purchase A House?

Most people will need to secure a mortgage loan to purchase a home. Many people remain in rental houses because they believe that they wouldn’t be able to afford a home or qualify for a mortgage loan. While these are valid concerns, you should consider that renting a home means you’re consistently paying someone else for a place to live, while owning a house gives you the opportunity to pay off the mortgage and have no monthly payment.

Don’t let mortgage loans intimidate you. A pre-qualification does not harm your credit rating and will give you the knowledge needed to know if you can move forward with buying a home. If you are denied, you’ll at least have the facts you need to address any issues and move towards that goal in the future.

The upfront cost of owning a home is higher because of the down payment and initial move-in costs, but the month-to-month costs of homeownership may be less than renting.

Mortgage Application Form with Keychain

🏦 Do You Qualify For Financing?

The industry average for down payments is 20% and may vary depending on your current credit score and the sale price of the home. In Richmond, residents who qualify for a VDHA First Time Home Buyers program could find it easier to purchase a house.

There are federally targeted areas in Virginia that are considered Areas of Economic Opportunity. Choosing a home in one of these areas can help you qualify for a VHDA home loan. We can offer you more information when you give us a call, but you can do some initial research using the official map on the VHDA website.

Concerns over qualifying for a mortgage loan stop many people from exploring their options, but even with a bit of bad credit, it may be cheaper to own a home instead of rent a home in the Richmond area. Bad credit doesn’t rule out homeownership. Six months of diligent work can make a difference when improving your credit position.

There are more loan options that work for those with less than perfect credit or little money to put down on the home. The Veteran’s Administration offers loans to active and retired service members and their families. There are state and federal loan programs that offer assistance to first-time buyers.

πŸƒβ€β™€οΈ Will You Need To Relocate Quickly?

Those with careers that require them to move often may find that renting a home makes more sense than buying. Keep in mind that moving without a notice can be costly if you need to get out of a lease agreement. Owning a home, even with frequent moves, gives you a chance to sell the property and move using your own time table.

Another option when you own a home and need to move is to use the house as a rental property. In doing so, you have an investment that covers the mortgage loan and gives you the option to sell when it makes sense for your needs.
for sale sign in front of home

πŸ’΅ What are Upfront Costs of Buying or Renting a Home?

Determining whether it’s cheaper to own a home or rent one can come down to whether or not you actually have the available cash to make a house purchase. You’ll want to have no less than ten percent down on the home, but in some cases, you can purchase a property with no down payment at all.

Comparing the move-in costs of rentals to those of home buying, it may be cheaper to own a home instead of rent one even at the outset. Rentals typically require the first and last month’s rent, a deposit, a damage deposit, and a pet deposit. Adding these costs up may match or exceed a down payment.

Potential home buyers may be able to drop their up-front costs even further. If you are in good standing as a borrower, consider requesting a lender credit. In this arrangement, the lender pays all or part of your closing costs for you.

πŸ“± Contact The Wilson Group

We can help!
We strive to make our client’s real estate transaction an overall great experience. Our business model is deeply founded in the fact that it is all about the experience!

A great way to gain information on a mortgage loan is to speak to a home loan officer who can show you exactly what you can afford. We have amazing connections if you would like to be in touch with one of them! Give us a call at πŸ“± 804-396-4625.

πŸ“‹ Will Your Needs Change?

Renting a home now may be suitable for your needs, but it’s beneficial to look down the road towards your future goals. Buying a home now may make sense if you plan to increase the size of your household or wish to remain in the area long term.

Don’t let the fact that you only need a one-bedroom home right now stop you from investing in your future. Getting a start on building equity can make future plans less costly and help you with a planning timeline for goals.

SUGGESTED: Mistakes to Avoid When Buying Your First Home

🎨 Will You Desire Changes to the House?

Renting a home limits your ability to personalize when it comes to decor and design. There may come a time when you require space to create ideal surroundings. Buying a home now means that you can enjoy those things without waiting!

Painting the walls, remodeling a kitchen, and converting bedrooms into suites or home gyms are other common changes that property owners make and renters are unable to do. Upgrades to a house can all add substantial value to the investment. Should you decide to sell your house, you can make a nice profit if you’ve added value to the home.
painting a wall blue

πŸ› οΈ Should You Consider Home Maintenance?

Think that renting a home is cheaper because you don’t have to worry about repairs and maintenance? Think again! Some lease agreements make it the renter’s responsibility to maintain heating and cooling systems, fix plumbing issues, and do landscaping.

Owning your home means that any money you put into maintenance, upgrades, and improvements goes toward the value of the home. When renting, you are putting money towards building value for that property owner.

πŸ—ΊοΈ Is It Cheaper To Own Or Rent A Home in Richmond?

The Richmond real estate market is diverse and offers homes in many different price ranges. The job market is strong and the economy is thriving with a focus on local businesses. The ability to realize a return on a home purchase investment has serious potential.

Richmond Real Estate Stats

  • Average 1-bedroom rent: $1,160
  • Average 3-bedroom rent: $1,660
  • Average mortgage payment: $1,243
  • Average homeowners association fee: $300

πŸ’² Richmond Homes for Sale by Price Range

Is It Cheaper To Own Or Rent A Home?
Article Name
Is It Cheaper To Own Or Rent A Home?
"Is it cheaper to own or rent a home?" There are benefits to each, but we'd like to give you some things to consider as you explore options in Richmond.
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The Wilson Group
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