If you’re renting in Central Iowa right now, you’ve probably wondered at some point whether you’d be better off buying.
It’s an easy question to ask and a surprisingly difficult one to answer.
You can compare rent with a mortgage payment, but that doesn’t tell the whole story. Buying a home affects your finances, but it can also change how you feel about where you live. You’re not just choosing between two monthly payments. You’re deciding how permanent you want your home to be and what you want to get out of it.
With a Home, You’re Building Something
One of the biggest differences between renting and owning is equity.
When you rent, you’re paying for the use of a home or apartment. When you own a home with a mortgage, part of each principal and interest payment goes toward paying down what you owe. If the home also increases in value over time, your equity can grow from both directions.
Home values aren’t guaranteed to go up every year. Real estate markets change. But over a long enough period, owning a home can become an important part of a family’s net worth.
There’s another advantage that’s particularly noticeable after you’ve owned a home for a while.
With a fixed rate mortgage, your principal and interest payment doesn’t increase just because everything else got more expensive. Property taxes and insurance can change, so your total payment isn’t frozen forever, but the mortgage itself can provide some protection against rising housing costs over the long term.
Meanwhile, renters may face a new rental rate each time a lease comes up for renewal.
There’s Something Different About Owning Your Home
Not every benefit fits neatly into a spreadsheet.
When you own a home, you can paint a bedroom, plant a tree, build a deck, remodel the kitchen or finally get the dog your lease didn’t allow.
You also tend to look at your neighborhood differently.
The house down the street isn’t just another building you pass on the way to your apartment. You start knowing who lives there. Your kids may go to school with the kids next door. You shovel the sidewalk, work in the yard, complain about the same road construction and watch the trees you planted get a little bigger every year.
There’s an identity and sense of permanence that can come with saying, “This is our home.”
That’s difficult to put a dollar value on, but it’s one of the reasons people take pride in homeownership.
But What About Mowing and Shoveling Snow?
This is Iowa. Eventually you’re going to have to deal with both.
One advantage of renting is being able to look out the window after a snowstorm and know that somebody else is responsible for clearing it.
But buying a home doesn’t necessarily mean signing up for every maintenance chore yourself.
Central Iowa has plenty of townhomes and other HOA communities where lawn care and snow removal are handled for homeowners. Even with a traditional single-family home, you can hire someone to mow the lawn, treat the yard or clear the driveway.
If you want to own your home without spending every weekend maintaining it, that’s something we can consider when looking for properties.
Homeownership Does Come with Responsibilities
When the furnace quits on a January night, there’s no landlord to call.
Roofs wear out. Water heaters leak. Appliances break. Owning a home means taking responsibility for those things when they happen.
That’s one reason it’s a good idea to have some money set aside for unexpected repairs.
A home warranty can also be an option. Depending on the plan, a home warranty may help with the repair or replacement of certain appliances and home systems when they fail. Coverage, exclusions and service fees vary, so it’s important to understand the specific plan.
For some buyers, especially those concerned about unexpected expenses during the first year of ownership, a home warranty can provide an additional layer of protection.
Sometimes Renting Really Is the Better Choice
Buying a home isn’t automatically the right decision for everyone.
If there’s a good chance you’ll be leaving Central Iowa in a year or two, buying and then quickly selling may not make sense.
Renting can also be a good choice if you’re still deciding whether you want to live in Des Moines, West Des Moines, Waukee, Ankeny, Johnston or somewhere else entirely.
Maybe you’re starting a new job. Maybe your family is changing. Maybe you simply aren’t ready to commit to one place.
Flexibility has value, and sometimes renting provides exactly what you need at that point in your life.
You Probably Don’t Need 20% Down
We still encounter buyers who think they can’t consider purchasing a home until they’ve saved 20% of the purchase price.
That’s not necessarily true.
Depending on the buyer and the loan program, some buyers may be able to purchase a home with as little as 3% down. On a $300,000 home, that’s $9,000 rather than the $60,000 required for a 20% down payment.
Putting less down means financing more and may require mortgage insurance, but for many buyers, waiting until they have 20% saved isn’t necessary.
If the down payment is what’s keeping you from considering homeownership, a conversation with a qualified mortgage lender may be worthwhile. You may be closer than you think.
Homeownership Can Give You Stability
There’s another benefit that doesn’t always get included in the rent versus buy calculation: stability.
When you own your home, there’s no lease coming up for renewal. You’re not wondering whether the rent will increase, whether the property might be sold or whether you’ll need to find another place to live.
You can start thinking in years instead of lease terms.
That stability can matter even more once you’ve found a neighborhood you like, established relationships with neighbors or have children attending nearby schools.
For many homeowners, putting down roots is part of the appeal.
So, Should You Rent or Buy?
For some people, renting is exactly where they should be right now.
For others, buying means much more than getting another place to live. It’s the opportunity to build equity, put down roots, have more control over your home, gain some protection against rising housing costs and become part of a neighborhood.
And if you’re somewhere in between, you don’t necessarily have to figure it out from behind a computer screen.
Sometimes it helps to tour a few homes and imagine yourself as a homeowner.
See what your budget could buy. Walk through a townhome where the snow and lawn care are handled for you. Tour a house with a backyard and imagine what you would do with it. Drive through a neighborhood and ask yourself whether you could picture coming home there every day.
You may come away excited about buying, or you may decide you’re perfectly happy renting for a while longer.
PROmetro offers short-term buyer agency options for buyers who want to explore homeownership without making a long-term commitment from the start.
If you’re curious about buying a home in Central Iowa, let’s go look at a few homes. Sometimes seeing the possibilities in person is the best way to decide whether you’re ready to make the move from renting to owning. Learn about buying with PROmetro.