If you have been renting for a long time, and are now thinking about buying your own home, you are on the verge of a major change to your lifestyle and finances. How do you know for sure when the time is right? Here are some signs you are ready to upgrade to your very own home.
- Your current space is too small. If the space you are currently renting is feeling too confining, then you could benefit from the extra space even a smaller home can provide. You can use it for storage, family (see below), or just a sense of more space and comfort.
- Your family is growing. When it is just you and a partner in a small apartment, it may only feel a little cramped. But once you start bringing kids into the picture, or if you have other family or friends come live with you, you can have a real drop in your quality of life. It makes sense to upgrade to a house, since you will all have more space, autonomy and privacy. Plus, hopefully you have more than one person bringing in income at least part-time, and can thus afford a house.
- You’re on a stable career trajectory, and can afford it. No matter what the rest of your life situation is, it is a must that you be financially ready before you buy a home. That means two things:
- You are earning enough money to afford a home.
- You have a stable enough career trajectory that you have no major concerns about your future ability to continue to afford that home.
If you are buying the home by yourself, you need to be able to rely 100% on your own income. If you are buying it with someone else, the stability of the relationship as well as the reliability of that person are also essential to consider. You will need to be able to continue to depend on that person’s payments, unless you can afford the house without them. If they do leave in the future, or stop contributing financially, you might be forced to get a tenant or roommate.
- You want to invest. Another sign that now is the right time to buy a home is if you want to invest in one. Housing values have skyrocketed over recent years, and likely will keep rising given the widespread shortages. By buying a home, you can start building equity. If the value of your home rises, so will the value of your equity. That adds to your net worth. If you eventually sell the house at a gain, you can pocket the difference. Owning a home with a fixed mortgage rate can also add to your financial stability. As rents rise, your mortgage rate will stay the same, helping to keep housing affordable. This is another reason a house can make a worthwhile investment in your future.
- You found a more affordable deal. Intuitively, we tend to think of houses as being pricier, and apartments being a cheaper alternative. But this is not always the case. Sometimes you can actually save money each month by buying a home. Adding together the mortgage, insurance, and other expenses may still come out to less than apartment rent. This could happen in scenarios where you are willing and able to buy a modest home in a lower cost neighborhood or zip code, rather than an expensive apartment in a major city. Just don’t forget about long term costs. Check to make sure that the bones of the home are in good condition: the foundation, the roof, the plumbing, electrical, and HVAC. If the home appears to be solid based on inspections, it may be worth it. Avoid houses with serious problems. They can turn into money pits, and be hard to resell.
- You want to customize your space and your life. When you rent, you have to follow a lot of rules about modifications you can make to the property. There will still be rules when you own your own home, but they will be much less restrictive. Plus, you’ll probably own the land that your home is situated on. Depending on zoning rules and building codes for that land, you may have the power to add more structures. This can open up a lot of doors for how you structure your daily life. For example, you could add a large, detached garage to work on projects, or you could build some ADUs so that you can host guests, invite family or friends to stay with you long term, or rent out to tenants.
Buy a Home in Virginia
Upgrading from an apartment to a home of your own is one of the most exciting milestones in your life. We are based in Blacksburg, and work with homebuyers and homeowners throughout the state. We can connect you with a competitive mortgage. To get started now, please give us a call at (276) 782-1677.
