Key Considerations When Deciding to Rent or Buy

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It can be a bit overwhelming to determine the most suitable choice between renting a unit and buying a home. Each option has advantages and disadvantages. Assessing some fundamental metrics, such as financial capabilities and requirements, personal lifestyle, and long-term objectives, is necessary for making the right decision.

If you plan to rent or buy in Boston, understanding the local market is necessary. Read this article as we will outline the main factors to consider, examine the advantages of buying and renting, and assist you with the steps necessary to make a decision.

Factors to Consider When Deciding to Rent or Buy

Renting, buying, or building your next home is a decision based on your situation. To make an informed choice, you need to deeply analyze financial resources, lifestyle choices, and the economy. 

Here are the parameters you are going to analyze:

1. Evaluating Your Financial Situation

Your finances greatly impact this decision, so it’s best to evaluate everything that goes in and out of your daily expenses. To begin, examine how stable your income is. If your job or income is erratic, renting may be a more suitable option. Alternatively, when purchasing an item, you will need to make a significant initial investment in addition to the down payment, closing costs, and subsequent maintenance expenses. 

The amount you can afford, both now and in the future, is critical, so be sure to assess your credit score, too, as it plays a major role in acquiring a mortgage.

2. Understanding Your Lifestyle Preferences

Consider your current lifestyle and how you want it to change. If you are looking for flexibility, renting would be a better choice, as it allows you to relocate to different places, especially if you are not interested in settling somewhere permanently. 

If staying in one place is your goal, buying a property leads to greater savings over time. Other factors to consider include family plans, job stability, and the timeframe for which you wish to live in a specific area.

3. Assessing the Housing Market in Boston

Your choice also depends on the area and its housing market. For example, in Boston, property prices and rents differ from one location to another. Examining the market may assist you in discovering emerging patterns, such as higher rents or a buyer's market with many properties for sale. Check local Internet forums or the opinion of a realtor for your options so that you can make the best decision possible.

Understanding Average Rent Increases

To better plan your budget, it's essential to understand the average rent increase in your area over the past few years. Landlords change rental rates at least once every year to cover inflation, general upkeep, or the general market.

For example, an area within Massachusetts, such as Boston, usually has a higher demand around these months and thus experiences even higher increases in rental expenses. Being up to date on these matters will help you manage your plans better and avert surprises.

To deal with the increased rental costs, begin by forming a loose budget that allows for increases in expenses. Always be open to negotiating with your landlord if you have a long lease with them, especially if you are a longtime tenant with great payments.

Comparing the Benefits of Renting and Buying a Home

Before making a decision, it's important to weigh the pros and cons of rent or buy based on your financial situation. Here’s what you need to know:

Advantages of Renting

Being on a lease makes mobility much easier, so it's a perfect option if you are not ready to settle down. This is a very handy option for people who frequently move because of work, or even those who are unsure about their future goals.

Deferred responsibilities and burdens also come with renting; you do have fewer obligations, and property damage and undue maintenance expenses would not need any of your attention. In the case of damage, just give your landlord or property manager a call.

Additionally, there are far fewer charges to pay out in advance, such as a security deposit instead of a substantial down payment, which further increases the appeal of rental homes, especially to novice renters. For many residents, especially of strongly urbanized regions like Boston, renting is serene and stress-free.

Advantages of Buying

Owning a home is one of the best decisions one can make for one's future. Payments toward a property help you build a valuable financial asset through equity, unlike renting, where all the payments go toward a landlord.

At the same time, purchasing a home offers greater control over the asset. There is also financial flexibility, as you do not have to worry about sudden spikes in rent or bad lease renewals. You are free to change the property, from the landscape to the gardens, to suit your tastes.

A home can also serve as a nest egg since it is likely to appreciate over time. While there may be higher upfront payments, the financial benefits from buying a home in the long term make it worth the investment for those who can afford it.

Bonus: Practical Recommendations for Decision-Making

Making the right choice between renting and buying doesn’t have to be overwhelming if you approach it step by step. Here are some practical recommendations to help you decide what works best for your situation.

Start by conducting a cost-benefit analysis and take a closer look at your budget to compare costs when you rent vs buy a property. This will give you a clearer picture of what’s financially realistic for your situation. If you’re unsure where to start, try using online tools or calculators tailored to Boston’s housing market to get more localized insights.

Don’t hesitate to consult experts such as real estate agents or financial advisors. They can provide valuable advice based on current market conditions and individual circumstances. Understanding their advice and guidance can help you avoid costly mistakes and make a more informed decision.

Finally, always keep your long-term lifestyle goals in mind. Think about how each option aligns with your future plans, whether it’s flexibility, stability, or building equity. By carefully weighing these factors, you’ll feel more confident about your choice and better prepared for what lies ahead.

Conclusion

Your personal finances, lifestyle, and future goals all play a role in whether to rent or buy a home. Renting gives you the opportunity to have more freedom without many responsibilities, while buying a home gives you stability and a way to invest.

It is important to keep an eye on local housing trends like the rise in rent in Boston, and get input from professionals. With careful consideration of experts, a cost-benefit evaluation, and some research, a positive decision can surely be made.

A Landlord's Guide to Keeping Long-Term Tenants

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When renting a property, many tenants consider it a short-term living situation only. “Younger independents” are classified as those between 18 and 24 years old, and a study confirmed that they rent a property for an average of 2.6 years. However, many move annually to coincide with the end of their year-long lease. There were similar findings for the 25 to 44 years old demographic of “flexible professionals,” but people aged 45 and older rent for about six years at a time or opt to purchase a property. 

Since the younger tenants are more inclined to leave their rental properties, they must be enticed to stay for a longer term. There are many amenities landlords can offer to keep tenants for longer periods of time. Read below to learn more about how to report unpaid rent to credit bureau and keeping long-term tenants!

Encourage Tenants to Sign a Longer Lease

Leases on rental properties are usually for set lengths of time, with common terms being one year. Landlords often use lengthier leases as a tactic to keep tenants in the same rental unit for the long term. Increasing the length of the lease from one year to two years or longer has many benefits for both the landlord and tenant. 

Landlords lose a significant amount of money when their units sit vacant. The average turnover cost is about $1,750 per month between advertising costs, cleaning and maintenance, lost rent, and utilities. In addition to the lost source of income, landlords also lose valuable time and effort looking to fill their empty units. When tenants sign longer leases, they also have a consistent source of rental income while avoiding the concerns of a new and potentially problematic tenant.  

Tenants also benefit from longer leases. The most obvious benefit is the relief and comfort of knowing you have a place to live for an extended period of time. Moving is a stressful and complicated process, so a long-term lease allows tenants to feel peace of mind as they prolong this anxiety. Additionally, a tenant with a strong credit score can negotiate more favorable terms on a longer lease.

Lease Renewal Bonuses 

Offering lease renewal bonuses to entice tenants is another way to ensure they remain in their unit for a longer term. This creates a mutually beneficial relationship between the landlord and tenant. The landlord does not have to deal with finding a new tenant and the aforementioned turnover costs. Conversely, the tenant receives compensation of some sort and does not have to deal with the stress of moving for an extended time period. Landlords have a variety of options for lease renewal bonuses. They can range from covering a month’s rent or utilities to giving a free television or piece of furniture to the tenant. 

Stay on Top of Maintenance

Landlords should also remain on top of maintenance requests. Tenants will remain happy and want to stay longer if their maintenance requests are resolved in a timely and professional manner. In fact, many tenants value this so much that it becomes a deciding factor when deciding to re-sign the lease. Not only does this keep tenants happy and more likely to stay longer, it saves landlords time and money! By remaining on top of maintenance, there are fewer repairs to be completed in the future turnover process. It also helps keep smaller issues from becoming larger and costlier repairs.  

Upgrade the Unit’s Appliances

Upgrading the unit’s appliances will also encourage your tenant to remain there longer. By replacing outdated appliances with more efficient models, your tenant will notice an immediate increase in convenience. While there will be installation and initial upfront costs, these newer appliances will require fewer repairs. This not only saves you money in the long run, but time as well. Appliances to consider replacing include the washer, dryer, and various kitchen appliances such as the refrigerator, dishwasher, stove, oven, and microwave. 

Landlords should also upgrade the unit’s HVAC system. Consider having a ductless mini split installed to replace any outdated central ducted HVAC systems. Ductless mini splits have a variety of benefits over other air conditioners such as window units and space heaters. Their most important quality is their efficiency. Other systems are wasteful and ineffective, but ductless mini splits operate at high levels of efficiency. Therefore, your unit’s energy bill will be significantly lower and your carbon footprint reduced. 

The lack of ductwork also makes their installation process and regular maintenance much easier. Mini splits also double as air filters and dehumidifiers, which significantly increases the quality of air in your home or apartment. Ductless mini splits are available in single and multi-zone systems, which make them versatile and appealing for tenants. Single-zone systems consist of one outdoor unit connected to one indoor unit. This allows you to control the temperature in the room or “zone” where the indoor unit is located only. 

Multi-zone systems consist of one outdoor unit connected to multiple indoor units, each located in a different room or floor. This allows you to control the temperature in one zone without impacting the others! A multi-zone system is a great way to entice a tenant into staying longer, especially if there are multiple renters with different temperature preferences. 

Communicate with the Tenants

Openly communicating with your tenants is another great way to keep them for longer terms. If your tenant ever asks a question or has any comments, make sure to respond in a timely and professional manner. Landlords must be personable and friendly while staying within the boundaries of a professional relationship. By communicating openly with the tenant, you could also ask them what could encourage them to stay longer. 

Granting any reasonable requests by the tenants will definitely entice them to stay, especially if they are changes to the unit. For example, allowing a tenant to alter any artwork, plant a garden, switch appliances, or customize the unit in some other way will make them happy and want to stay longer. 
Since most renters are inclined to move out of and into new rental homes on a yearly basis, it’s important for landlords to try and keep their tenants beyond this time frame. Fortunately, there are many ways to do this!