It’s no secret that Seattle has one of the hottest real estate markets in the country. Seattle is quickly becoming one of the most expensive cities to live in which can make finding your perfect home a real challenge.
There are many factors to consider when deciding if you should buy or rent. (Truthfully, it can be a little overwhelming for most of us!)
Typically, most of us assume that renting is less expensive because you’re able to avoid maintenance costs and repairs. In a hot real estate market like Seattle, finding a rental that is affordable (and less expensive than a mortgage would be) can be a challenge.
According to a 2016 survey by Smart Asset you would need an annual salary of $98,271 to afford rent in Seattle. In contrast, the average annual salary required to buy a home in the Seattle area starts at $83,969.34
There isn’t a one-size-fits-all answer to making the decision and the choice is highly dependent on your individual circumstances, more and more people in the Seattle market are opting to buy instead of rent.
Here are some key factors to consider when making the decision to buy or rent:
Benefits of Renting
#1. Less Initial Expenses
Most rentals require first and last month rent plus a security deposit, while the initial output for a home purchase is going to be higher because of the down payment and closing costs. So unless you have a cash reserve to work with, renting may a better option for you in the short-term.
#2. Reduced Stress
As a renter, if something in your rental breaks or needs repair, it’s a simple phone call to the landlord to have it taken care of. There’s no financial burden to you, the renter, as you’re not responsible for ongoing maintenance of the property. (That said, owning a townhome can be a great low maintenance option.)
Additionally, as a renter, you’re not responsible for things like putting on a new roof or replacing the windows. The good news is that all of these things are someone else’s problem. The bad news is that you have no control over the timeline for repairs. So whether it’s the stove or a door that needs to be repaired, you’re stuck with whatever repair timeline the property owner decides on.
#3. More Freedom
Renting can provide a good deal of flexibility if you’re looking for a short-term option. When you’re renting you have more freedom to make changes to your living situation on a faster timeline.
For example, if you need to move because of your work, as a renter, you’re able to simply give your notice to terminate your lease and move.
Benefits of Buying
#1. Lower Cost in a Hot Market
With buying the initial costs may be higher, but in a hot real estate market like Seattle it can actually cost less to buy than rent. Depending on your down payment and mortgage rate, the difference between the two could potentially mean hundreds of extra dollars in your pocket every month.
Even with the added costs of maintenance and taxes, finding the right home at the right price can have a positive impact on your bottom line.
With a mortgage, you can lock in at a fixed rate for a set period of time and avoid dealing with yearly rent increases. It’s much easier to do your long-term financial planning when you have a set cost for housing.
#2. Investment in Your Future
Even if your rent is less than a mortgage payment for your dream house, the long-term investment makes a difference. When you rent, you’re paying for someone else’s investment each month but when you buy a home, you’re building equity in your home and increasing the worth of your asset.
Each time you make an improvement or upgrade to your home, you’re investing in its overall value. Plus, these investments in your home can make a positive impact on your overall quality of living.
#3. More Housing Options
When you live in a competitive rental market like Seattle, finding the perfect place can be difficult. The demand outweighs the supply, so you may find yourself “settling” for a place that’s just okay, or stuck paying more in rent each month to get everything you’re looking for.
When you buy a home, you get what you want and can do it for a price you’re comfortable paying. You’re not stuck jumping on a rental property because you’re desperate or worried you won’t find anything else suitable.
#4. Tax Benefits
Owning a home has its benefits when it comes to taxes. There are multiple deductions available for homeowners, including potentially being able to deduct your interest each year. Less money paid in taxes means more money back in your pocket.
So what’s the right decision for you?
With the Seattle rental market showing no signs of slowing down, this may be the perfect time to consider purchasing a home.
If you haven’t already, sit down and crunch the numbers to figure out what option is best for you now and in the months and years to come.
Once you do the math, you may be surprised that home ownership is more of a possibility than you ever thought. This is especially true when you consider a townhome as you can get the modern design and luxurious features you want at a price that works for your budget.
Westcott Homes offers modern living and smart design for today’s active lifestyles, in neighborhoods where you want to live. . Our flexible floorplans and luxurious interior details add up to a home you’ll delight in every day, and for years to come.