Are you a tenant looking to become a homeowner? Do you need help navigating the purchase of your current home? Perhaps you’re a big fan of the interior design, or you love the location. Whatever your reasons are, this guide on how a tenant can buy the property they live in can help. This post covers the pros and cons of buying the house you live in, tips for negotiating, and when you should involve a lawyer.
Pros and Cons of Buying the House you Rent
Pros
- You’re familiar with the House’s Condition
One of the most apparent benefits of buying the house you rent is that you’re already familiar with the house’s condition. Sometimes new buyers find that their home has a few significant flaws that bring down the value after the purchase is already complete. However, when you already live on the property, you’re familiar with the ins and outs of the whole place. For instance, if Bay Property Management Group Baltimore County manages the property, then it’ll be well-maintained and suitable enough for you to claim the deed,
- You Don’t Have to Move
It’s not easy to pack up and move to another house, even the next neighborhood. Buying the property, you already live in saves you the stress of packing and unpacking. Also, you get to save money by calling a professional moving company.
- You Can Negotiate a Better Price
When a landlord is ready to sell their rental property, they’re more inclined to give their tenants a discount because of the pre-existing bond. Besides that, you also have a better negotiating position since you’re already familiar with the property.
Cons
- You Could Be Settling
A significant drawback to buying the property you already live in is that you could be settling. Sometimes, renters opt to buy their current house because they can’t be bothered to shop around the block. However, if you’re unaware of what is on the market, you could miss out on other options. Also, it could hurt you during negotiations because you’ll be going in with less information and fewer choices.
- You Have to Take on the Loan
When you’re a homeowner, you can eliminate the rent costs from your expenses. However, mortgage repayments will most likely fill that spot. Even if your landlord has already paid off the house, you’ll still need financing to purchase it. Thus, you can expect to take on a loan when you buy the property.
- You May Want to Move
When considering buying a house, it’s a good idea to take a step back and evaluate your options. Purchasing a property is a huge commitment, and since real estate isn’t the most liquid investment, it could be difficult for you to sell. Thus, if you’re not sure or hesitant to commit to your current home for at least five years, it’s not worth it.
Tips for Negotiating Terms
- Do Your Research
One of the best tips for negotiating terms is to be prepared. Even landlords must research to ensure they’re buying a successful investment property. Before you commit to a purchase, you should be aware of the current state of the house. Also, you should gather data on what comparable properties in similar neighborhoods are going for.
- Speak with Your Landlord
After your research, your next step is to speak with your landlord. This step is crucial if they’ve not informed you that they’re selling the property. If you’re considering buying the house, you should ask the property owner if they would consider selling the home now or shortly. If your landlord is ready, you can then commence negotiations.
- Be Certain
Buying a house is a big commitment, and you must be sure before approaching your landlord. Several obligations come with owning a property, including interest repayments, taxes, maintenance, and more. Hence, if you’re not ready to take up these responsibilities, it’s better to continue renting.
When Should Lawyers be Involved?
The short answer is always. Unfortunately, buying a property is much more complicated than purchasing any other good. You can’t simply swipe your debit card and walk away with your purchase. You must go through several steps before you can legally claim the rights to the house. Thus, it would help if you involved a lawyer to:
- File the property transfer documents correctly
- Ensure that transfer of the deed is done correctly.
- Secure building permits if necessary.
Legal counsel that looks out for your best interest gives you added assurance. It also saves you from incurring unnecessary real estate taxes, and
Conclusion
This article covered how a tenant can buy the property they live in from their landlord. We highlighted that some pros include familiarity with the home’s condition, getting a better price, and avoiding a move. On the other hand, you should remember that you could be settling, and becoming a homeowner is a big responsibility. Thus, you shouldn’t do it if you’re not ready to commit to your current home for a while. Although, doing your research and speaking with your landlord can help.
