Many of our clients ask if they should buy or rent in Atlanta. So in today’s article we give you tips plus the five best reasons to buy and the five reasons best to rent.
Five Reasons To Buy Rather Than Rent In Atlanta
1. Beat Inflation
Rents tend to go up with inflation. And currently our economy is trending toward inflation. Owning a home is a great hedge against future inflation.
Rents in Atlanta have been on the rise. And renters are at the mercy of the market and their landlord. A 3-5% yearly increase can quickly add up.
As an example, a $2,000 per month rent increases to $3,100 after 15 years. On the other hand, home buyers lock in a reasonable mortgage today and enjoy the peace of mind of knowing what their payments will be for many years to come.
2. Improve Savings
Forced savings translates into a good investment. Historically home ownership has been a good investment. Of course it’s not without risk.
It goes without saying that you don’t want to become over extended. Be conservative and you can still buy on a huge margin. In some cases with just 5% to 20% down. That’s a deal not found in other investment venues like the stock market or bitcoin.
3. Build Equity
Historically buying a home has been an elevator to generating personal wealth. Home buyers quickly learn to love equity. No more throwing money away on rent. When deciding whether to buy or rent in Atlanta this might be the main factor. Of course this is not always true, it depends on the time frame.
Every month part of your monthly mortgage payment goes to paying down the principal of the loan. So normally when the home is sold years later, the owner receives part of the investment back. Namely the principal paid plus money from any market appreciation. Compare that to rent which is a 100% expense.
4. Save On Taxes
Tax incentives for most home buyers in Atlanta remain significant. The new tax plan reduces the tax benefits of owning a home for some but not most. Especially effected are those in highly taxed, expensive markets like California and New York. Mortgage interest and property taxes remain tax deductible for many Intown Atlanta home buyers. Rent is of course not deductible.
In the long run, home owners can often make money on the sale of their home and take the profits tax free. The home must be your primary residence and the tax free profits are limited but at this point it’s still a strong incentive.
5. More Freedom
Enjoying more freedom is perhaps the best reason for buying! Don’t like the ugly old kitchen? Renovate it! Owners are free to make significant changes they want in their home. Renters must just live with how it looks.
There is really something special about the feeling of owning your home. It comes down to feeling free. We Americans like freedom. Owning gives us more control to do what we like. So if you’re asking should I buy or rent in Atlanta, remember to consider the intangible benefit of feeling free. If you are thinking of buying, here are the best questions to ask when buying an Atlanta home.
Quickly calculate what you can really afford using our mortgage calculator.
Clearly everyone’s circumstances are different and there are no one-size-fits-all answers. If you’re thinking of buying you can browse all current listings with our Atlanta home search. Or contact us, we’re here to help.
Here Are Five Reasons To Rent Rather Than Buy In Atlanta
Rent for career and financial flexibility, to save a down payment, avoid repair bills, real estate taxes and market risk.
Flexibility is the biggest and best reason to rent. And there are dozens of other reasons you might want to remain flexible.
For example, career flexibility. You’re in a new job and want to see how it goes before committing to home ownership. Or you’re only planning to stay in Atlanta for a couple of years. Our tip is to ask yourself if your horizon is three years or more. If you don’t have reasonable visibility (in you job, relationships or life in general) beyond three years then rent. You’ll be glad to have the flexibility when you want to make a change. Plus, if you were to buy then have to sell in the first few years, it’s unlikely your home will have appreciate enough to offset the significant transaction costs of selling. Or maybe the flexibility you seek is financial. Simply put, you have other places you’d rather invest your money.
2. Save A Down Payment
If you don’t quite have the down payment to buy a house then renting and saving a down payment makes sense. It’s called delayed gratification. A novel concept these days.
3. Avoid Maintenance Costs
If you don’t want to deal with all the hassles of home ownership then renting is the way to go. When the furnace goes out, the landlord fixes it. Gutters need cleaning, call the landlord.
4. Avoid Real Estate Taxes
Real estate taxes in Atlanta’s in-town neighborhoods can be surprisingly high. For example, a 3 bed / 2 bath bungalow can come with real estate taxes of $10,000 a year. If you’d rather not be committed to pay those taxes, renting might be best.
5. Avoid Market Risk
If you think home prices will decline you may want to rent to avoid market risk. Of course, nobody has a crystal ball. But locking in a rent rate for a few years can help you avoid the risk of buying and having your home price decline.
Should You Buy Or Rent In Atlanta?
Still not sure if you should buy or rent in Atlanta? No problem! It’s easy to run the numbers for buying vs. renting in Atlanta. A great resource for this is the New York Times Buy vs. Rent Calculator.
A Note For Millennials
Until recently Millennials have reportedly not bought into the American dream of home ownership.
Many have a justifiably different idea of their American dream. Some had no visibility for consistent earnings and thus didn’t want the burden of a mortgage. Some just didn’t want to be tied down.
And so the question “should I buy or rent in Atlanta” was not even in play for Millennials. Now that’s all changing and changing fast.
Recently we’ve seen far more Millennials buying homes in Atlanta. Of course there are still plenty of Millennials who prefer buying vs. renting in Atlanta. But the energy now is toward buying. Reasonable current interest rates and concern about increasing rates are fueling that fire.
Thanks For Reading!
We hope these tips have helped you decide whether to buy or rent in Atlanta. If you think it might be time for you to buy a home, start by talk with a trusted real estate professional. Read reviews from our clients. We’re here when you’re ready. Feel free to contact us.