Real Estate

To Buy or Not To Buy...What's Next?

The struggle to decide whether to buy or sell your home is one of the most important financial decisions that many of us will make in our lifetimes. For most Americans, a home is where their largest storage of wealth exists. For others, especially first time buyers, buying a home can be a daunting, and sometimes a daunting task. While others, like renters, might simply feel like they have no other alternative. The questions that everyone in some form or another ask are: “What will be the value of this decision?” or “Can I afford it?”


The question to buy or rent gets more complicated when markets heat up, for residents of Dallas County, most home values have steadily increased with a major spike in 2017. According to recent real estate market sales, values have increased in the last four years, our local Multiple Listing System (MLS), The North Texas Real Estate Information System (NTREIS) provides a detailed snapshot of the market which can be provided to you by our team. 


Here is a quick comparison: 

Initial costs are the costs you incur when you go to the closing of the home you are purchasing. This includes the down payment and other fees.


Recurring costs are expenses you will have to pay monthly or yearly in owning your home.

  • These include mortgage payments, condo fees (or other community living fees),

  • Maintenance and renovation costs

  • Property taxes and homeowner’s insurance. Property taxes.

  • The interest part of the mortgage payment and, in some cases, a portion of the common charges are tax deductible.

The resulting tax savings is accounted for in each item’s totals. The mortgage payment amount increases each year for the term of the loan because the tax credit shrinks each year as the interest portion of the payments becomes smaller.


Opportunity costs are tracked for the initial purchase costs and for the recurring costs. The former will give you an idea of how much you could have made if you had invested the down payment instead of buying your home.


Net proceeds are the amount of money you receive from the sale of your home minus the closing costs, which includes the broker’s commission and other fees, the remaining principal balance that you pay to your mortgage bank and any tax you have to pay on profit that exceeds your capital gains exclusion. If your total is negative, it means you have done very well: You made enough of a profit that it covered not only the cost of your home but also all of your recurring expenses.


The financial benefits of homeownership

Evident year round, but particularly around tax time – they seem to jump off the page!


  • Homeownership Builds Personal Wealth Over Time.

  • You Build Equity Every Month.

  • You Reap Mortgage Tax Deduction Benefits.

  • Tax Deductions on Home Equity Lines.

  • You Get a Capital Gains Exclusion.

  • Personal property without restrictions often by a Landlord.

  • Allows creative control of the property.

  • Property can be rented generating income from renting.

  • Tax deductions related to income-generating properties.




Initial costs include the rent security deposit and, if applicable, the broker’s fee.

Recurring costs include the monthly rent and the cost of renter’s insurance.

Opportunity costs are calculated each year for both your initial costs and your recurring costs.

Net proceeds include the return of the rental security deposit, which typically occurs at the end of a lease.


Which is better? 

While renting has a smaller initial investment (down payment, little or no maintenance fees and no taxes...), renters also do not enjoy the benefits of homeownership.  For example: if someone would have purchased a home in 2014, with a purchase price of around $225,000, and sold the same property (in good condition) at the peak of the summer of 2017 the same home could have garnished a sales price of around $375,000 with a gross net profit of $150,000 (before closing costs).  However, if someone would have rented the same home in 2014, at the end of the lease in the summer of 2017, the renter would have received a refund of their deposit estimated at $1,500 or one month's rent (if the home was left in good condition and no repairs are required).  The renter actually paid down the owners mortgage for about 36 months.


The benefits of renting include:

  • Financial flexibility. Think of a ocean liner and a speedboat. ...

  • Financial stability. ...

  • Career flexibility. ...

  • Low maintenance costs. ...

  • No market risk. ...

  • You don't pay taxes or insurance directly. ...

  • No cash outlay required. ...

  • Some bills are included in the rental price.


We here at Premier Castle Realty Team won’t make one of the largest financial decisions of your life for you, buying or selling a home, but we’ll help get you there. As part of our “exceeding expectations”  process of buying or selling your home, we offer some of the best professionals in the industry that cover The Dallas-Fort Worth TX area.  If you’re in the early thinking stages, we can assist you with a free consultation, it costs you nothing. Contact any of our Premier Castle Realty Team today: (833) 722-7853