By Glenda Brass, MBA
For renters who aspire to be home owners, transitioning from an apartment to a house requires a shift in their thinking that they may not be prepared to make. The financial changes that come with owning, the need to consider planting longer-term roots in a neighborhood, and new neighborhood rules are things renters may not be thinking about enough.
Moving can already be one of the most stressful times in a person’s life, but it may be doubly so for a new home owner. Following are a few nuggets that might make the transition easier.
Understand how your financial investment is changing. Renters may see an increase in their monthly rent every lease term, but they don’t see exactly where it goes — owners put the monies toward the mortgage, property taxes, insurance, and even “luxuries” such as trash pickup. As home owners, you don’t have a landlord who handles all these details, so you need to be ready to juggle the financial responsibilities of home ownership. When you move from renter to owner, it’s important to budget and make smart financial decisions. This will ensure your longevity in the home.
Be happy with your location for the long-term. As a renter, you can bounce around from home to home every year if you want. But when you own a home, you have to stay put — unless you plan on renting it out, which most homeowners don’t. Because of this, location plays a much more significant role in the process. As you shop for a home, think about evaluating school districts, access to amenities, and commute time to and from.
Be prepared to abide by new rules. Renters don’t think about a possible homeowner association, or neighborhood watch rules they may be governed by, such as trash pickup rules or any curfews or rules pertaining to animals. Make sure to get all the information on neighborhood rules and associations to ensure you understand what your new obligations will be.
You need to get into the mindset of an owner. Life as a renter is significantly different than life as a homeowner. Once you purchase a new home, you will no longer have a landlord to tend to your many needs, like lawn care, plumbing, and a host of other home ills. I would recommend that you establish relationships with individuals who can be called upon to support you when something goes wrong. A good handyman can definitely come in handy, as well as a plumber, and other certified specialists. Don’t try to do everything yourself. If you don’t know any specialists, get recommendations from friends, family, or your real estate consultant.
Your neighbors can affect your value and you, theirs. Most renters don’t care who their neighbors are as long as they’re quiet (enough). But you will probably want to know whether your new neighbors are renters or home owners. This knowledge can help you gauge current and future home values in the neighborhood. If the neighborhood consists mostly of rental properties, it is likely a homeowner will lose money on their house in the future. Renters do not always feel responsible for maintaining their properties the way homeowners do. Property value comes down to curb appeal. Less-appealing neighborhoods often have more-appealing prices, which is not always good for buyers and home owners.
If you’re aspiring to transition from renter to homeowner, understand that the transformation will require changes on your part. However, if you’re willing to do what is necessary to buy and maintain a home, you and your family will reap huge benefits for years to come.