In today’s volatile housing market, staying in a rental might makes sense for plenty of people.
And if you’re a renter paying affordable rent, moving makes even less sense. According to a recent Realtor.com® report, rental prices across the U.S. set a new record. In June, rents reached a median of $1,876 in the nation’s largest metropolitan areas.
So if you’re among the many people choosing to renew a lease rather than looking for a new place to live in this unpredictable market, don’t worry. Remember that what goes up, must come down—eventually.
In the meantime, we’ve gathered some tips on what you can do to make the best of your rental situation.
Focus on building your down payment
Remaining in a rental means you can and should focus on minimizing your existing debt—and building up your down payment.
“You have the opportunity to build your down payment so that you can afford a better house and a better interest rate,” says Gunner Davis, a real estate agent with Coldwell Banker Realty in Tampa, FL. “Target saving a minimum of 20% down payment for your desired house, which will make your homebuying process easier.”
Depending on your timeline, and your lease, you might even want to consider investing some of the money you’re putting aside.
How and where you invest depend on the level of risk you’re willing to take, says Jeff Tricoli, a real estate agent with Tricoli Team Real Estate at Keller Williams in Palm Beach, FL.
While a savings account can earn 4% annual interest, a fixed deposit account can generate returns closer to 7% annually.
Make saving a habit
Developing good saving practices should go hand in hand with building up your down payment. But many people never learn the best practices for saving.
An easy fix? “Set up an automatic transfer of a specific amount from your paycheck each month to a savings account for a down payment,” says Theresa Raymond, the owner of TN Smoky MTN Realty in Sevierville, TN.
Simply decide how much you can afford to stash away each month based on your monthly budget.
Build your credit
One of the benefits of minimizing your existing debt and saving for a down payment is you will be actively working to build up your credit score. A great credit score will be a huge help when the time comes to land a home loan.
“Your rental payment history impacts 35% of your credit score, so also make sure you pay rent on time,” says Kevin Huang, CEO of Ambient Home and a real estate investor.
Other tips for building your credit score include the following:
- Paying your bills on time every month
- Using no more than 30% of your total credit limit
- Paying off your credit card balance every month
- Checking your credit report and fixing any errors right away
Remember, changes in credit scores don’t happen overnight, but it’s possible to raise your credit score within one to two months.
Personalize your space
Taking the time to upgrade your rental will help make it feel like home versus a temporary living situation.
“Nothing will make you itch to get out more than a house not feeling like a home, and personalizing the space will help you settle in and get comfortable,” says Matt Woods, co-founder and CEO of Sold.com.
Luckily, there are several things you can do to improve a rental unit that are cheap, easy, and gratifying.
For instance, you can replace outlet plates and switch covers to add a fresh look to the place. Or consider swapping ho-hum light fixtures that feel more like you and have some style.
Savor the joys of being a renter vs. a homeowner
It’s easy to get caught up in the race to become a homeowner and forget to enjoy the benefits that come from being a renter.
“To begin with, renting means you’re not tied to a specific area,” says David Bitton, co-founder and chief marketing officer at DoorLoop.com. “If the job market or career choice changes, you may easily relocate to adapt.”
And you don’t have to worry about maintenance on the property. And repairs can and should be handled by your landlord. Another plus? Most homes don’t have the amenities of apartment complexes, including a swimming pool, fitness center, and spa.
The post Stuck in a Rental? Here’s How To Make the Best of It appeared first on Real Estate News & Insights | realtor.com®.