Renting vs. Buying a Home

The choice to rent or buy depends on your unique situation. No one can decide what will be the best option other than you. It’s important to consider all the factors of each choice. There are staple pros and cons, but there are also some trends that change within the rise and fall of the housing market.

Currently, with the state of inflation and high demand for housing, the cost is continuing to go up. While this impacts both renting and buying, it can weigh heavier on the renting side because your monthly rent could spike with little warning. Homeownership can feel more predictable in this market. This is especially true for fixed rate mortgages. A fixed rate option maintains the same principal and interest amount per pay period (escrow amounts can periodically fluctuate). Many buyers like this predictability as it allows them to budget more accurately.

Manufactured housing has some home buying and financing specifics that may not apply to site-built housing (or vice versa), but they are similar for the most part. One main difference can relate to building equity. Manufactured homeowners have the best bet of building equity when the actual home is converted to real property (this typically requires converting the manufactured home title from personal property to real property). Site-built housing is typically considered real property from the start so no title conversion is needed. Be sure to consult with your lender on the specifics and if this is the right option for you.

Costs

Both renting and buying can require certain costs and fees upfront and throughout your time of residency. Here are some things you need to think of when considering the possible costs:

Home Buying

• Down payment
• Closing costs - Appraisal / Inspection (these are typically included here)
• Monthly Mortgage payments (some loans may have different pay schedules)
• Maintenance - This includes seasonal maintenance, emergencies, and unexpected issues. (Ex: plumbing issues, washing the exterior of your home, etc.)
• Utilities
• Property taxes and homeowner’s insurance - This usually will be through an escrow account – however, it will be your responsibility to pay this if there’s no escrow account set up for you through your mortgage company.
• Trash/ Recycling services
• Moving/ Transport (if you purchase a manufactured home and move it to your land)
• Lot rent if your home is in a community or on rented land

Renting

• Security deposit and fees
• Monthly rent (usually first and last months)
• Utilities (if not included in rent)
• Renter’s insurance
• Fees for pets (usually per animal, often can depend on weight or breed, limited to rules)

Pros and Cons

Now let’s look at some of the potential pros and cons of renting and buying.

Home Buying Pros

• Manufactured homes are typically more affordable per square foot than site-built homes.
• Monthly payments can be less than monthly rent.
• More protection against inflation – Once you’ve purchased a home, your payments are set if you obtain a fixed rate loan. (Escrow can impact this if your taxes or insurance fluctuate).
• Completion of loan – You can eventually pay off your loan.
• Pets – Your pet(s) can have a home without the extra fees, limitations, and extra space.
• Personalization – You can paint the walls, do landscaping, upgrade appliances etc.

Renting Pros

• Low upkeep – Your maintenance is typically done by your landlord or contracted out.
• Community resources – You can enjoy things like pool/ playground/ clubhouse access and special events, if available.
• Mobility – When you rent you are usually only bound by a year commitment, sometimes even less. This can be attractive to people making life transitions.
• Often easier to get into financially – Some rentals will do a credit check, but it’s far less likely to impact you than it would be on a mortgage loan.

Home Buying Cons

• Maintenance and lawn upkeep is your responsibility
• Property Taxes
• Homeowners Insurance
• Potentially a long-term commitment

Renting Cons

• Rent can be adjusted with little notice
• Payments don’t go toward equity for you, but someone else.
• Lack of privacy
• Limited parking
• Renter’s insurance (not required but helpful)

This is not an exhaustive list of all the costs or the pros and cons behind renting and homeownership. However, it is a good overview of what to expect and can help you prepare for whatever choice you make. Whether you’re budgeting for a home purchase or just hoping to stay somewhere for a year or two – you must weigh the options for yourself.

If you are interested in purchasing, we do finance manufactured homes. If you would like to consider us for financing, call with your questions today. We’re here to help every step of the way!

*All loans are subject to credit approval.