There is an interesting question circling around the water coolers today…. should I rent a home or should I buy a home in The Woodlands. Buying real estate in The Woodlands and surrounding areas lately has been more about the location. Did I mention the Location? Boy, is that really important in today’s market. We are seeing more and more home owners deciding to keep their properties instead of selling them. These new landlords are hoping that the market continues to appreciate, eventually netting them a higher sales price in the future.
What has happened is this, The Woodlands and Montgomery county inventories are now at or near historic lows, depending on the sales price. With fewer months of sales inventory on the ground, rental inventory has increased at a higher than normal rate. This has caused the valuations of our home prices to escalate and the value of the rental properties to remain low. According to the Houston Association of Realtors, the home median price in The Woodlands has risen nearly $100,000.00. I last checked HAR.com and the number of active homes for rent vs the number of homes for sale is a 10:1 ratio. That is not a usual situation.
Now comes the question. Should I spend $350,000 for a home in The Woodlands? If I do, and I put down 10% which is $35,000.00 and get a conventional mortgage for $315,000, my home loan payment, including principle, interest, taxes and insurance would be appx $2700. I can rent that same house in The Woodlands or Montgomery County for appx $2400 and I only need to put up a deposit for $2400 that I should get back if I keep the house in current condition. If I am renting, I am also not responsible for the repairs. That could add an additional 1% to the cost of ownership or another $3500 per year in potential savings for renting vs buying.
The Woodlands and Montgomery County are expected to experience some low inventories and higher demand over the next several years. Buyers are going to have to expect that home values will continue to increase due to the limited inventory levels. With rising home values, should you buy instead of renting to capture the appreciating market? It is a very interesting question, and I think that you have to ask yourself, am I going to stay in one place for 7-10 years? If so, purchasing may be the better choice. However, if you do not know your time frame to be in one location, renting may be the better option, with more homes to choose from, and less headache coming from the costs of repairs. It may be best to call Rick Raanes with The RockStar Group at Keller Williams The Woodlands & Magnolia for the best solution for you. We can help you find that perfect property to call home.
What would you do? Rent a home in The Woodlands or Buy a home in The Woodlands?