by Dan Wolf
on Tuesday, July 23rd, 2013 at 8:36am.
When deciding to rent or buy Anchorage real estate, it is not about the numbers only. There are other factors to think about. This includes emotions, your family and other personal reasons. All of these things affect your home-buying or renting decision.
Although we at Wolf Real Estate Professionals do not have a crystal ball to tell you what your future looks like for your family, job and income, we can help you understand the process. The process that you will encounter as you begin to contemplate buying a home in Anchorage.
Living in the moment is a great concept, but when it comes to buying Anchorage real estate you need to take a step back and ask yourself what you can afford and if it makes sense to rent or buy.
After examining that question, that only you can answer, if you still feel like buying a home in Anchorage, go see a mortgage professional. He or she will help you figure out how much you can afford and pre-qualify you to purchase a home.
Still on the fence? Here are a few other things you should consider before renting or purchasing Anchorage real estate:
What To Consider Before You Rent or Buy Anchorage Real Estate
Tip 1 - Don't Do It For Investment Only – Buying Anchorage real estate is a good investment but it's not the best investment. The best return on your money would be to invest in the stock market. Real estate doesn't earn the ROI that a mutual fund would. So, yes, in the long run it's a good investment, but not for a quick and immediate ROI.
So why is it a good investment? Besides the fact that every payment you make takes you one step closer to owning, there are also tax incentives. If you pay enough in mortgage interest and real estate taxes each year that it exceeds the normal deduction, you can deduct even more. This is typical in the first few years of a mortgage.
Tip 2 - There Are Good and Bad Sides Owning a Home – Many clients have tunnel vision and see buying a new home as a natural next step. Although it is an exciting reason to buy Anchorage real estate, you should also now the pros and cons of homeownership.
On the good side you are building equity because the home value rises and your mortgage shrinks. That's a win-win situation! Also, cost don't change, so no surprise rate and payment increases... as long as you don't have an adjustable-rate mortgage.
On the bad side you are fully responsible for everything. If something breaks, if someone breaks in, it's your problem. However, if you rent, it's the landlord's problem. Again, this is a con only if you don't hvae the budget. If you put every penny you earned into your down payment, you may not have the funds to fix any issues that may arise.
So Should I Rent or Buy Anchorage Real Estate?
After reviewing everything above, you still have a hard decision to make. Should I rent now or buy now? That really is up to your current situation. Is your job secure? Do you plan on leaving your job? If so, you should wait to buy and rent instead. Can you afford the closing cost and other fees? If so, maybe you should buy now.
A combination of all of the above will give you an idea of what to do. Take a sheet of paper and write down the pros and cons of buying as well as your current financial situation.
Don't' just buy because the home is pretty or because you want to achieve the American Dream. Those are good reasons AFTER you are qualified.