A Place to Call Home: Renting vs Buying
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May 5, 2020
A few weeks ago, I got a call from my landlord. He informed me that he is going to sell the badass loft I’ve been living in for the past three and a half years. The truth is I’ve outgrown it, but it has by far been my favorite place I’ve ever lived. And it’s the longest I’ve ever stayed in one place since I was 10 years old. I’m sad to go, but at the same time, I’m excited for something new. I’ve shared a bit of my home search on Instagram, but there’s so much more to it than the bits and pieces I’ve posted.
Renting vs Buying in Atlanta
The first thing I’m facing is renting vs. buying. I’ve been a renter my whole life; well, since I was 18 at least. When I went off to college, my parents told me good luck, and that was it. I used student loans and many jobs to pay my way through college. By the time I was done, I was $40,000 in student debt. I’ve been digging myself out of that hole since, leaving me in no position to buy. Until now. I felt like everything was aligning perfectly: flexibility on move date, the state of the housing market here in Atlanta, mortgage rates vs rental rates, and finally feeling like I want to stay put. But it’s not that simple.
Cute furniture, huh? Check out my full living room makeover here!
Although I have excellent credit, no debt, and a good amount of savings and assets, I don’t look as great on paper since I’m self-employed. I’m sure many people can relate, and I know getting a mortgage isn’t easy for anyone, but I had absolutely no idea it was this complicated. So now I’m back to square one weighing the pros and cons of renting vs buying in Atlanta.
One thing I noticed is that with the current market, renting in Atlanta is extremely expensive. Ryan and I need at least 1,200sqft, preferably more, and we haven’t been able to find that for under around $2250/mo. – a rate that will only increase each year as all apartment complexes raise rent as much as legally allowed. We can afford it, but that’s not the point. It’s a ridiculous amount of money to spend when monthly payments for a mortgage of $400,000 are about the same price. That purchase price could get us so much more space and we’d be building equity instead of paying someone else’s mortgage.
For the first time in my life, I feel ok making a commitment of this magnitude. I’ve never had the desire to buy because I wanted to be able to pick up and leave at any moment with no strings attached. But after having experienced being in one place for so long, I actually like it much more than I ever thought I would. It’s a great feeling to be able to put down an address with confidence that it won’t be changing soon.
The one thing that is more important to me than anything, though, is the financial aspect. It’s important for me to explore all my options. If I were to find a good-sized rental for a great price, it might be the right move to buy me some more time to search for the perfect purchase. But I could also stumble upon a home for sale with tremendous value tomorrow and to be able to take advantage of this buyer’s market we’re currently experiencing in Atlanta would be a dream come true. There’s so much to think about in renting vs buying in Atlanta and while this phase of the process isn’t easy, I think it will definitely be worth it in the long run – whether I buy now or not.
I’m new to all this, and I could use all the advice I can get. Please weigh in on this major life event in the comments!
Are you a renter or a homeowner?
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Photos by Ryan Carpenter.
March 2, 2020 @ 10:09 am
Michael and I are going through this too!! We had pretty much decided to buy for sure next summer and use the next year to really stash cash but now with this stupid coronavirus and concerns of furloughing pilots bc not as many people are flying (keep traveling!!! Hahah) we are considering putting it off even longer to save even more to have an even bigger safety net. I’ve also heard mixed things about getting a mortgage with my massive law school student loan debt. Ugh!
March 2, 2020 @ 2:17 pm
I feel you on this!! It’s crazy to me that this Coronavirus craze is driving down the stock market and mortgage rates!!!! I want to jump on it and take advantage of the opportunity because I’m worried if I wait, I’ll just end up paying more in the long run, ya know? Such a tough decision!!! Either way, I have learned A LOT throughout this process!! Having a great lender is absolutely KEY!
March 2, 2020 @ 11:03 am
Well heres my take and you already know some of our situation but I’m also only a phone call away if you need help. BTW we have an amazing real estate agent thats also a great family friend if you ever are in need of one.
First we lived in the city just inside the perimeter……nice apartment …….good price ….shitty schools though ….shitty neighborhood. Not a ig deal till Sofi started school ….then we obvs needed to move. So we moved outside of the perimeter. WAYYYYYYYYYYYYYYYY outside the perimeter and found a 4 bedroom ranch house, great neighborhood, great school, started at $1300/month but within a few years it was up to $1600/month but worth it to be in a safe neighborhood. Obviously though yall dont have kids so you dont need to worry about school and stuff like that but pricewise it may be worth it to move a bit further from the city.
However soon people told us “you could buy a house and get even more space and a newer home for the same price” . This was true in a sense …..a base mortgage was roughly the same price …..but then you factor in property tax which can be a lot. So theres good and bad I think to both renting and buying.
Renting outside the perimeter = cheaper + more sq. footage but you are basically giving the money away
Buying outside the perimeter = more expensive due to property tax + homeowners ins. + PMI payments , however you are building equity rather than giving your money away
Also be very careful renting ….90% of the rentals in Atlanta especially homes for rent outside the perimeter are owned by invitation homes aka waypoint or colony homes. They are the nightmare rental company we had in the flooded house so just beware of them
I think you should consider areas you would like to buy a home in …but rent there for a few years first and see how you like it
March 2, 2020 @ 3:09 pm
You’re so right – it’s important to factor in mortgage, taxes, HOA, insurance, water, etc. into your monthly payment. There are many more costs than just the mortgage!
Right now, I’m looking at a place I love (2600 sqft) where the mortgage + all other costs would be right under $3000/mo. Whereas renting, we’re mostly seeing a max of around 1200sqft for $2300+/mo., which like you mentioned, is only going to go up each year. So we’re talking double the size for not that much more per month. This is all inside the perimeter within the same 2-mile radius.
I’ve lived in Old Fourth Ward for almost 4 years and I love the area, so I feel comfortable in the neighborhoods I frequent. I am definitely glad I don’t have to consider school districts, having room for kids, a yard, etc.! That would definitely make it much more complicated!
Whatever happens, yall have to come check out the new spot as soon as we move in!! We will have a guest room for you, promise!!
March 3, 2020 @ 6:12 am
Oh FO SHO! We will definitely come check it out! You should have a house warming !!!
Oh and BTW my experience renting vs buying…..when it comes to the increase every year. Renting increased so mush more ……ours was $75-$100 /month increase every year because the landlord can increase it however much they want
In regards to buying (as long as you have a fixed rate) the increase is based on property taxes going up or down in your neighborhood. Plus your property tax is estimated the first year so if there is a difference at the end they add it to the following year and divide the payments up. Sometimes you may over pay property tax so the following year the payment might go down.
Our house base mortgage was $1675 (can you believe that?!?!) however the PMI since we didn’t have 20% down payment added $200/month….homeowners insurance was around $80/month and property tax was around $300 ish and its all escrow-ed into the monthly payment so originally our payment was $2260 but the property tax went up in the first year so going into year two our payment went up to $2340
March 4, 2020 @ 9:52 am
Yeah I will definitely have a housewarming! I have heard that there are laws to increasing rent. I think it can only be increased like 5% every year or something but that might be Fulton County. And that’s still a lot when rent is already $2250+!!!
The taxes are going to change for us too because since the place I want is a new build, we don’t know what the taxes will be! We are estimating on the high end, so hopefully that will benefit us in the end! Do taxes typically go up every year? I have no idea how this all works!
March 6, 2020 @ 7:18 am
rent increase laws are in effect in most places but they seem to have blurred lines to me …i think a lot of companies just assume the tenants are clueless and try to take advantage of them. I know when we tried fighting the increase amounts they would basically tell us to move if we didnt want to pay it…..and i think they do that because a lot of people dont have the money to pay a lawyer to fight it it for them
As far as the house buying – (call me if im not explaining it well because I can probably explain better over the phone)
we bought our house in april ’18 so they basically estimate your taxes for the remainder of the year. So they gave us a total and broke it up over the remaining mortgage payments …..at the end of the year it ended up being underestimated by like $300 …..so that $300 gets added to the next year on top of whatever the local tax increase is
March 2, 2020 @ 11:12 am
Hello Megan!
It’s your super Broker/Owner, Realtor friend and best friends Dad!
Absolutely you should buy!!! The timing is so good with mortgage rates. I am sure that my Mortgage person down here in beautiful Cape Coral can recommend someone up there. Plus I am a Nationally Accredited Buyers Representative and we have a large network of Buyers Reps all over this great country. I can help you find someone that will really look after your best interest!
Please don’t hesitate to reach out to me.
March 2, 2020 @ 2:13 pm
Omg thank you so much!! I wish you could come up here and be my realtor since I know I can trust you!! I do have someone I’m working with and he seems to be pretty knowledgable in the area I’m looking at. I will definitely let you know if/when I need your help!!!! <3
March 2, 2020 @ 3:40 pm
I am currently a renter but I live in DC where home prices are out of control – I saw a 1200 sq ft condo (not a house, a CONDO) go for $500k! Town homes go for several million! I think I’m going to be renting for a while…
But if you live somewhere where the housing market isn’t as bad and you’re in a position to buy, you should go for it!
March 2, 2020 @ 4:43 pm
Wow, that’s crazy!! If you want to live in the fun areas in the actual city, new condos are usually in the 700s-million+ here, but they are typically closer to 2000sqft. I haven’t seen much newer development for smaller size condos here surprisingly! Most smaller condos are pretty old and need to be updated, so while they may be $350k-$550k, you have to put in more money to update. BUT if you’re willing to, they’re totally livable even if not the prettiest!
March 2, 2020 @ 6:39 pm
This is a good conversation to begin! I guess I don’t have much input because pricing in Virginia is much different. My husband and I rent a 3-bedroom, 1200+ sq ft townhome for under $1000 per month and absolutely adore it. If it weren’t for the fact that we are technically “wasting” money right now because we can’t get it back later, I’d never feel the need to move! But I’m sure in the long run it’ll be wonderful to own a place for ourselves one day!
March 3, 2020 @ 10:35 am
Oh wow! That definitely makes such a difference!! The pricing is much more reasonable for y’all. If that were the case here I would feel totally different about renting for a little bit longer. I can see why you love it so much!
March 2, 2020 @ 8:13 pm
We recently purchased our home, so I understand where you are coming from. Renting feels like such a “waste of money” at times…whereas buying you are putting equity into your own home.
March 3, 2020 @ 10:33 am
Yes, exactly!! This is the #1 reason I want to buy. I would much rather be putting my hard-earned money into my own place than someone else’s!
March 3, 2020 @ 12:26 pm
I’m hoping to become self employed and buying a home eventually is one area I fear with it. But I know a lot of people do it so there’s hope! Good luck with the search, I’m sure the right place is just around the corner.
March 3, 2020 @ 5:53 pm
It is definitely very difficult! It’s near impossible for me to do it by myself at this point since I haven’t been filing my taxes with that in mind! I never intended to buy, so I wrote off my expenses as a normal business would. Very frustrating!! If you plan for it, it’s definitely much easier!
March 3, 2020 @ 4:05 pm
Sometimes I feel like I am going to rent forever. I am definitely a city girl and just don’t think I’d be happy in the suburbs, which is where I could afford to buy a home. Even the condos in my area are out of my price range unless I want something less than 1000 sqft (NO THANKS). I guess the biggest factor for me would be convenience. I don’t know that I’m willing to sacrifice being able to walk to grocery stores, restaurants, the lakefront, etc in order to own a property. My opinion could certainly change in a couple years, though. Best of luck with whatever you decide! If it keeps you at ease, there is really no wrong decision.
March 3, 2020 @ 5:59 pm
Oh I 100% agree! I would not be happy in the suburbs or in something under 1000 sqft! I want to buy in the city! The place I want is 2600 sqft. As you can imagine, it’s not cheap, haha. That’s why I’m having such a difficult time!! It will all work out I’m sure!!
March 4, 2020 @ 9:10 pm
I have been a homeowner for 10 years now and it has been a challenge with budgeting, paying bills on time and trying to save on what I have left over. I personally think being a homeowner is the best decision that anyone can make if they can afford it especially it is a good investment as well as opposed to renting is a waste of money, not investing to make money when the value goes up. It’s a huge decision and having to weigh the pros and cons. Wishing you best of luck on what you decide to do❤️
March 4, 2020 @ 11:28 pm
Thank you so much! I’m glad to hear you think buying is a great choice. It’s a big commitment, but I would so much rather my money build wealth rather than pay someone else’s mortgage! But it can be risky and expensive. Such a tough decision!!!!!
March 9, 2020 @ 9:17 am
I have been a homeowner for 9 years now and I don’t regret it. I never liked the idea of paying down someone else’s mortgage when I could be paying down my own.
March 10, 2020 @ 7:42 am
Agreed! That’s my #1 inspiration throughout this whole process. I would much rather invest my hard earned money into something that’s my own.
March 9, 2020 @ 11:09 am
We are homeowners now, but spent many years renting in Georgia and Maryland. Every month I felt like we were setting our paychecks on fire because we didn’t own where we lived, but we weren’t in the position to buy and settle down just yet.
March 10, 2020 @ 7:41 am
This!!! That’s how I’ve been feeling too! I figure if I’m going to be spending about the same every month, I’d rather it go towards something that’s MINE and build equity. I’m really feeling like buying is the right decision!
March 9, 2020 @ 6:32 pm
Renting vs buying is a hard decision for sure! Especially when you live in a very expensive housing market like Atlanta. I will say owning definitely has its perks buy the buying process isn’t very fun LOL
March 10, 2020 @ 7:40 am
Lol definitely!! That’s what I’m hoping for- that buying is the worst part and once it’s over I can enjoy the perks!!