This week’s Q&A column is sponsored and written by Jillian Keck Hogan Real Estate Group and McEnearney Associates Realtors®, the leading real estate firm in Alexandria. To learn more about this article and relevant Alexandria market news, contact Jillian at 703-951-7655 or email [email protected]. You may also submit your questions to McEnearney Associates via email for response in future columns.
Question: Is now a good time to buy a home or rent?
Answer: Alexandria brings about thousands of new jobs year over year. We also are home to the Military, Government, contractors, self-employed people from all over the world, and soon to be home to Amazon HQ2 and Virginia Tech Innovation Campus. The question to buy or rent comes from these diverse individuals, but the answer is more complex than a simple yes or no.
The best way to begin navigating this very important question in your life is to separate your unique needs/desires by asking yourself these questions:
- Goals: What is most important to me? Location of home/proximity to work, quality of life, lowest costs?
- Timeline: How long am I going to be in this area?
- Cost: How much is this going to cost me? Relocating costs? Cost of breaking a lease? Closing costs/taxes for a new home purchase
- Benefit: Which is more beneficial, from a practical and financial standpoint?
“Resolutions” is a word thrown around quite a bit as we rapidly approach the new year. The definition is a firm decision to do or not to do something. Year over year we see a flood of new buyers enter the market at this time. Many have made a decision to look for a new home, but many have not asked themselves what exactly am I aiming for? Determining your underlying needs that are non-negotiable and deciding what is more of a “want” than a true “need” can be extremely helpful when making a hard decision on housing.
With low inventory in our marketplace, buyers and renters alike need to know what they can do without (washer/dryer, garage, backyard) and what is an absolute need (3+ bedrooms, attic space, basement). When the right property becomes available, you will then be confident in your decision to move forward.
In addition to your goals, timeline is another huge factor influencing one’s decision to rent or to buy. How long will you be physically living in the area? Does your work potentially plan to move you out of the area? Also, five years goes much faster than you think. Think in 5-10 year increments for both renting and buying. What are the short-term and long-term effects of the decision you are making at this moment?
If you are considering renting an apartment, condo, or detached home for the next 1-2 years you will need to look at the costs involved. Standard in Northern Virginia is a one-month security deposit along with paying your first month’s rent. If you have pets you will be paying a pet deposit and possibly pet rent of $50-$100 per month. If you are relocating to the area and decide to rent then buy, PLEASE look at the lease agreement you are signing to know what it will cost you to break the lease.
Most require a 2-month cancellation fee, but some require tenants to pay out the entire rest of the lease term. If you are considering buying and will need to finance, speak with a lender now to find out what you would pay to settle on the home and what your monthly payment would look like. You would be surprised to see that often times these numbers are not far off, or even that the rental rates are much, much higher.
Renting and buying each have their own benefits, whether it’s financially beneficial or based on practicality. If you are new to the area, renting can allow time to familiarize yourself with neighborhoods before buying. Renting is also a good opportunity to work on saving up for buying a home, reducing debt and working on improving credit.
As for purchasing a home, investing in your own home as opposed to paying rent to someone else is always liberating. The tax benefits are not too shabby either.
Whether renting or buying, always consult with your local real estate agent for advice. We’d love to help you with the process! Contact one of our team members today — Jillian Keck Hogan, Kristina Eells and Adrianna Vallario.
If you would like a question answered in our weekly column or to set up an appointment with one of our Associates, please email: [email protected] or call 703-549-9292.
McEnearney Associates Realtors®, 109 S. Pitt Street, Alexandria, VA 22314. www.McEnearney.com Equal Housing Opportunity. #WeAreAlexandria