The Rent to Own Transition

Owning a home has been the American Dream for centuries now and the transition from renting to buying is like a rite of passage that can be exciting, scary, and overwhelming for many people. Not only are you taking on more responsibilities as a home owner, but you also take on the out of pocket expenses to purchase the home and ongoing expenses to maintain the home.

Here are 5 ways to mentally prepare for this transition:

1. Know your total investment: Get a full breakdown on what to expect in terms of down payment money, closing costs, inspection fees, appraisal fees, home warranty costs, etc. It’s always a good idea to preemptively meet with a trusted Real estate agent and loan officer so you have these numbers fine tuned as much as possible before doing your home shopping.
2. Budget for the future: The days of your maintenance man fixing everything on your work order are coming to an end. Prepare for the unexpected maintenance expenses that will come up. Making sure you have a home warranty in place for your first year in the home is a great way to hedge against the risk of pop up expenses.
3. Map it out: Go ahead and decide on what area you’d enjoy living in for the next 3–7 years. Think of your commute, family, gym, shopping, or whatever common routes you have in your daily life.
4. Consider your future exit strategy: You don’t have to have a concrete plan in place at this point, but it’s good to look at your first home as an investment and a stepping stone. Most people will move on to their next home between 3 and 10 years after purchasing their first. I’ve had clients move after only 1 or 2 years in their homes and while this is doable, it’s not the most financially savvy way exit.
5. Look at the big picture: When viewing homes, it may come as a shock that they are not as up to date as many apartments are for example. This is normal. Look towards the potential of the home. Any cosmetic updating can be done over time and will increase the value of your home in most cases. For your first home, make sure you are getting the things you can’t easily change, such as the location and the size/layout of the floorpan and yard.

Now that you’ve mentally prepared yourself, have fun with it! Buying a home can and should be a fun process. You’ll make memories in your home that will last forever and you’ll have a wealth building asset that will take care of you down the road.