Previously, we discussed a few reasons that a home for rent may be a better option for some individuals than buying a home. While owning your own home is considered the American Dream, real estate isn’t for everyone. If you are looking for a home for rent, you know that to gain the benefits, it’s important to work with a good landlord or property management company. If you’re someone who isn’t sure about whether you should look for a home for rent or buy real estate, consider these additional reasons that renting may be for you.
Saving for a Down Payment
Buying your own home can be a substantial financial investment. Just the initial purchase requires a large sum of money for the down payment, the inspection, homeowner’s insurance, and other fees. Additionally, in order to qualify for a conventional loan, you need at least 5 percent of the purchase price available as a down payment, 20 percent if you don’t want to pay mortgage insurance (PMI). It can take time to save up for a down payment for a home and in the meantime, renting remains the best option.
Don’t Increase Debt to Income
One of several factors that go into your credit score includes what your debt to income ratio looks like. If you have a large amount of students loans or credit card debit but you don’t have a very good income, your debt to income ratio may be poor. If you have a moderate debt to income ratio, than buying a home may negatively impact this ratio by increasing your overall debt. Waiting until your income increases, or you pay down existing debt before you buy, may be ideal for you.
If you’re looking for a home to rent in the Little Rock area, contact us at Real Property Management Central Arkansas. We’ll help you find the perfect rental.