If you are deciding between renting or buying a condo in New Orleans, there are several factors to consider. Assess your financial readiness, long-term plans, and the general pros and cons of renting versus buying a condominium to help you choose whether to buy a condo or rent one.
FINANCIAL READINESS
Your financial readiness is the number one deciding factor in choosing between renting or buying a condo. If your finances and credit meet the following general criteria, you may be in an excellent position to buy a condo:
- A credit score of 620 or higher
- At least 5% to 20% of the cost of the condo in savings
- Low debt-to-income ratio, preferably under 43%
LONG-TERM PLANS
Your long-term goals are a major element in deciding between renting or buying a condo. It makes sense to buy a condominium if your general long-term plans include:
- Staying in the New Orleans area for at least five years
- Growing equity and purchasing additional properties in the area
- Renting out your properties to bring in extra income
If you plan to move around, switch careers, or don’t plan on investing in future rental properties, it makes more sense to rent for the time being.
GENERAL PROS AND CONS OF RENTING VS. BUYING A CONDO
When deciding between buying and renting a condo, consider each option’s pros and cons.
Benefits of owning a condo versus renting include:
- Fixed-rate loan versus rising rent rates
- Equity growth versus no equity
- Homeowner tax benefits versus no benefits for renters
- Build your investment portfolio versus no long-term return
- Potential to earn rental income versus complications with subletting
The most significant downside to buying a condo is the initial cost of home buying; a downpayment and closing costs can be substantial. Also, if you plan to rent out your property as an investment, managing rental units can become burdensome.
However, you can address these issues with financial readiness before purchasing and working with an experienced property management company to manage your daily rental operations.
PURCHASE A CONDO FOR LONG-TERM BENEFITS
If you are financially ready for the commitment and cost, purchasing a condo provides you with long-term benefits that renting can’t offer. After buying, consider renting out your condo as an investment property to put cash in your pocket.
Hire a property management company like Certain Management to handle all the ins and outs of renting to gain extra income while earning equity on your condo purchase.
