Friday, March 28, 2014

Buying vs. Renting Homes in Kansas City- Leavenworth to Olathe

Buying vs. Renting Homes in Kansas City - Leavenworth to Olathe
There are many reasons to buy Kansas City homes and reasons to rent.  The benefits of buying versus renting real estate in Kansas City are relative, depending on a person's needs and goals.  Those who can afford to purchase their condos or homes in Kansas City weigh several factors including the financial aspects of the equation.

When comparing the financial aspects of buying versus renting, it is important to compare apples to apples and oranges to oranges.  Using this rough equation, a quick estimate of the financial picture can be determined:  Look at the cost of purchasing one home in the same neighborhood as renting a similar home.  To determine the price-to-rent ratio or P/R ratio, simply divide the price of the Kansas City home by the yearly cost of rent.  If the number is less than 20, it may be a better financial decision to purchase. 
Money is only one factor to weigh.  Many people do not purchase a home to make money or to save money.  There are other advantages to owning Kansas City real estate – from Leavenworth in the northwest corner to Lansing homes and Johnson County real estate in Olathe. 
Homeowners take pride in ownership.  Owners gain certain freedoms such as the ability to paint the walls whatever color they choose or change out the cupboards, install a gourmet kitchen or modify the property in other ways.    They also develop relationships in their neighborhoods and gain a certain amount of confidence and stability from being familiar with their surroundings.
For some people, a few major reasons make renting a better than buying.  What are the future plans?  How long does the buyer envision staying in the home?  And finally, does a person really want the responsibilities of maintaining a home, paying property taxes, and being tied to a mortgage payment for a long period of time? 
The primary deterrent to buying is a debt and/or lack of savings.  In Oprah Magazine’s May 2011 article, financial expert Suze Orman says "If you have credit card debt and haven’t saved for a sizable down payment, you are not yet ready to own."

Orman also talks about the financial risks of buying a home and selling it within 5 to 7 years.  She explains that when you sell a home, you should plan on paying the full agents fee, closing costs, the cost of moving, and other expenses.  She says that the property will evaluate at approximately 3 percent annually.  So do the math.  When buying, plan to stay in the home long enough to recoup the costs of moving.
Shelly O'Boynick
Realtor, Broker Associate
RE/MAX Realty Suburban
12701 W. 87th Street
Shawnee Mission, KS 66215


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