2020 has left a great deal of uncertainty for many first-time home buyers. Although the massive decline in mortgage interest rates has seen a positive return to the real estate and housing market, many newcomers to the market are uncertain what next year will have in store for them.
With many property investments and buying opportunities that have ceased over the last few months, the question some are left pondering over is whether renting or buying real estate in 2021 will be a lucrative and financially sustainable choice. Although real estate, both home, and commercial real estate have seen many attain great financial success in recent years, the uncertain climate, combined with buyer suspicion have left the housing market falling to all-time lows, especially in the United States.
Although the question won’t be fully answered until next year – here are our reasons why you should either own or rent real estate in 2021.
Renting real estate
For years rentals have been an immensely popular choice for those who are in the market to purchase a property or new home, but who are struggling to build a positive credit score or who’s currently not earning enough income to do so.
Although renting seems like the better option, in the long run, the monthly rent one pays can amount to a larger sum over the years. In light of recent global events, many people in a lot of industries and sectors have been forced to work from home. Instead of living close to work, people are now living and working in the same place.
Having a more comfortable work-stay environment has seen many younger generations rather rent larger and more spacious apartments or houses. What this has meant, is that although the trend of renting places is declining – people are looking to purchase homes and properties in quieter and more established suburbs and neighborhoods.
A contributing factor to renting a property in 2021 is where one will be working – and history has shown us that people go where jobs are. When cities open again, and offices make a full return, more renting opportunities will come to life. The real estate market is under a great deal of stress, as many residents may be struggling to pay full or partial rent in the coming months as the pandemic lingers into the new year.
Owning real estate
The real estate market will see many inclines and declines over the coming period – but overall, our experience has thought us that owning property or real estate in the current economic environment seems to be the better option.
This statement can only be fully trusted if you are in a financially comfortable position to do so, with the added understanding of how the real estate market works, how and when mortgage interest rates are going up or down – and finally making the right purchase with the right set of buying knowledge.
Owning a property in 2021 will mean that you will have more financial freedom, as rental spaces will probably see an increase in monthly payments as building investors are looking to make up for lost income. Small and crowded buildings have also become something many are now more wary of than ever before and of course, how working from home can be functional, yet enjoyable.
Additionally, mortgage interest rates are the lowest it has ever been in nearly 50-years, with a long term 30-year mortgage interest rate starting as low as 2.67%. Owning a property sets you up for a positive credit score and is a long-term investment that can become financially lucrative as demand rises, and supply becomes less and less.
A final take
In our experience, renting will mean you’ll be able to pay a fixed month-to-month rental fee, but 2021 might see small rental fee increases and changes to renting contracts. Owning a property won’t always leave you with more or some financial freedom, but 2021 looks quite promising in this regard. Our final take on this matter is that if you are currently renting, keep doing so until the market has become more stabilized to rent. Additionally, purchasing a property now would mean you’ll be able to pay back mortgages at the lowest interest rate ever. You’ll need to make the decision that fits your budget.