Rent or Bu?
If you’re relocating to the Peninsula from another part of the country, you’ll have a lot of adjusting to do. There’s the temperate, year-round weather, great schools, delicious and diverse dining options, as well as proximity to both the beach and the mountains.
And one other thing…the very expensive real estate.
Depending on where you’re relocating from, you can likely expect to find half the square footage and lot size of your previous home at double or more the price.
“I work with a lot of companies that specialize in relocating professionals, and when people come out here, they have a definite sticker shock,” said Kristin Hayes, founder of Venture Property Management. “A lot of people want to buy, but they don’t realize how competitive the market is and they get outbid and end up having to rent for a while.”
So what should you do? Rent first and get a feel for the area and the market? Or jump in and buy a place you can call home?
Putting aside the obvious financial considerations, there are advantages to both options.
Relocating: Advantages of Renting
Renting gives you the opportunity to live in the area and get to know the cities, neighborhoods and schools in the area. Once you live here for a few months or a year, you will have a much better sense of where you want to live. The communities can be very different, and even individual neighborhoods have their own unique characters. Renting first enables you to take the time to be sure that the location you choose will be the right fit for you.
Renting first lets you get to know the market over time, instead of during a rushed trip to scout for homes to buy. Visiting lots of open houses, and watching the market will give you confidence in making a decision to buy and the price you will pay.
By renting first, you may realize that you don’t need as big a house or yard as you originally thought. By renting a smaller house first, many people moving from sprawling homes with huge lots find that they can easily and happily live in a much smaller—and less expensive—house than they would have thought possible.
Prices may level off or the competition may lessen. It’s no secret that real estate prices are at an all-time high on the Peninsula and many homes sell with multiple bidders. Real estate tends to be cyclical and there’s always the possibility that our current seller’s market may turn around to favor buyers by the time you’re ready to buy.
Relocating: Advantages of Buying
Real estate prices may continue to rise, making buying a home less affordable the longer you wait. Nobody knows where real estate prices will go, but the recent trend has prices rising at an incredible pace—sometimes as much as 20% or more over a year. That kind of appreciation could price you out of a home that you could afford now.
If you have pets, renting may not be an easy option. When the rental market is extremely tight, as it has been over the past couple of years, landlords can make more restrictive requirements on renters. One of these can be a strict “no pets” policy. This can severely limit your choice of rental homes.
Settling into a school district. If you have school-age children who are going to public schools, it can be disruptive to them to move from one school district to another if you decide to buy in a different area than the one in which you first rent.
Security and Stability. There is a reason that home ownership is part of the American Dream. Owning a home gives you and your family stability, allows you to “nest” and enables you integrate into the community.
And, as they say in the MasterCard commercials, that’s priceless.
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