Our Next Step: To Rent, Buy or Somewhere in Between?

We are currently in the process of selling our home, and it raises the question: What's the next step, to rent or to buy? Of course this question can vary greatly from person to person or couple to couple depending upon a variety of issues, situations, locations, and of course personal preferences -- not to mention the real estate market and condition of the economy.

Our plan at this point is to move out west. We've been in the Midwest long enough and are ready for a change. With banks still dumping foreclosures into the system and the real estate market seemingly far from a recovery of any sort in many areas of the country, it's hard to know which direction to go with our living situation. So as we ponder our next move, even though we'll be taking our time in doing so, here are a few of the options we are considering and why.

Renting an Apartment

I've always loved renting apartments. The great part about apartments, besides not having to really do any repairs or maintenance, is that typically after a year (sometimes less), you have the option to move along if you'd like.

I've always found this aspect of apartment life appealing. Not having to wait around for the place to sell, pay a realtor commission, pay closing costs, and avoiding similar hassles is particularly nice. You also avoid a large portion of the property liability and tax aspects, but still have the ability to get to know the area in which you live and enjoy its benefits.

The bad part about renting at the present moment is that it is getting more expensive in many areas of the country. With foreclosure properties and short sales continuing to pour onto the market, people still have to live somewhere, and if it isn't a house or with family or friends, it will likely be an apartment, meaning occupancy rates are up and with them the cost of renting.

Renting a House

In my opinion, if you're going to pay to rent a house, you might as well buy, although there are a few situations in which I might say otherwise. If you are renting to buy or to get a feel for homeownership or homeownership in a particular area, renting a home could be a very good idea. And of course, if you can't get financing but also can't find affordable apartments big enough to suit your family, renting a home might be an option as well.

Since it's only my four-year-old son, wife and I, the only way I would really consider this option for our particular situation is if the location in which we end up doesn't offer much in the way of apartments. The good thing about the rental home market at the moment though, is that with many owners unable to sell their homes, they're looking to rent and often quite affordably.

Buying a House

After our last experience with owning a home (which was also our first experience), I can't say that this option tops our list of living arrangements. However, I'm not willing to rule it out all together, especially if we find the perfect fit. And while I don't particularly care for all the stress and responsibility that comes with a home -- or the property taxes, maintenance costs, and higher utilities -- I have to say that there are some positive aspects of homeownership if you can find the right home, in the right place and at the right price.

Having a place to call your own in which you accumulate principle and could eventually pay off completely is certainly nice. Maintaining and modifying a home can also be quite rewarding. And with the housing market seemingly still far from any sort of sustained recovery in most areas, losing money on the home we've just sold wouldn't be as devastating if we could reinvest in a property that has lost a similar value.

What We're Leaning Toward

At this point, we're taking a wait and see attitude. I don't think the housing market is going to go up much anytime soon; and jumping into something too quickly could put us in another bad position.

Probably, since we'll be new to the area wherever we move, we'll rent (most likely an apartment for a year -- maybe a house if no apartments are available in the specific area we choose) to get a better feel for the place before we commit. Maybe by that time, the real estate market will have shaken itself free from the built up inventory of excess foreclosures and things will have bottomed in most areas. Even then, I'm not sure if owning will be for us again or not.

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Disclaimer:

The author is not a licensed financial or real estate professional. The information provided in this article is for informational purposes only and does not constitute legal, real estate or financial advice. For financial advice, readers should consult a licensed financial advisor, realtor or lawyer. Any action taken by the reader due to the information provided in this article is at the reader's discretion.