Just outside of Chicago is the picturesque town of Naperville, where you’ll find beautiful natural scenery like the DuPage River. If you’re considering moving to Naperville, then you may be wondering whether to rent versus buy a home in the area. Even in today’s real estate market, there are pros and cons to consider if you’re renting or buying a home in Naperville, making it that much harder to decide what fits your goals.
If you’re looking to buy a home in Naperville, the current median sale price for a home is $587,201 as of July. Or if you’re checking out apartments for rent in Naperville, the average monthly rent for a two-bedroom apartment is $2,263. Depending on what you can afford and today’s mortgage rates, it may be that renting is cheaper than buying. But, there are many reasons why buying a home now may be more beneficial for your needs than renting. In this Redfin article, we will delve into the pros and cons of renting and buying in Naperville, helping you make an informed decision based on your unique circumstances. Let’s get started.
Advantages of buying a home in Naperville
Increase in investment opportunities
The home prices in Naperville, and the surrounding areas, have been steadily increasing year over year. This trend shows market growth and a greater possibility in investment return. Becoming a homeowner is more likely to offer a good financial gain in the future.
Money in your own pocket
The question, “Why rent when you can own?” applies much to our market. Owning a property allows you to stop paying another to live and start building equity into your own asset. In addition, the rental market in Naperville is typically lucrative, leaving a great opening to become an investor if you wanted to rent your home to another in the future.
Disadvantages of buying a home in Naperville
The increase in interest rates has made home buying more expensive. Home prices have still stayed strong and lenders are finding new creative ways to help with the rate increase, but buyers are still up against finding the right affordability. This increase in interest rates has made buyers have to adjust their monthly budget to fit their home buying wants or make exceptions in their home search to better fit their budgetary needs.
If you consider yourself more of a picky buyer, you may have a difficult time finding the perfect home as we have low inventory in the Naperville area. With low inventory, you’re more likely to run into multiple offers and bidding wars. In addition, buyers are having to make exceptions for some of their home wants or compete in those multiple offers, especially when homes are updated or renovated.
Determining if you are ready to buy a house in Naperville
There are several factors to consider if you’re deciding whether to rent vs buy in Naperville this year. Here are five points to look at:
1. Time of year: Naperville is a highly seasonal market. Time of year is a huge factor to consider when both selling and buying. You’ll typically see more inventory available in the spring and summer. During this time, homes usually sell faster, at a higher price, and you’ll have more competition. Less inventory is typically available in the fall and winter. However, there is typically less competition during that time and more likely to get a home at a lower price.
2. Financial stability: Before starting your homebuying journey, it’s important to understand your finances – including having a good credit score and a stable income. Be sure to set aside some additional funds for down payment, closing costs, home inspection fees, and additional expenses that are part of the homebuying process. It’s also good to build an emergency fund in case you incur any unforeseen costs.
3. Personal goals: You’ll also want to evaluate your personal goals and priorities before deciding to buy a home in Naperville. Are you looking for a move-in ready home or a renovation project? Do you want a home with modern upgrades or historic charm? Determining what’s important to you in a home can help you figure out if buying a home in Naperville aligns with those goals.
4. Long term commitment: Compared to renting an apartment, buying a home is a significant financial investment and time commitment. So, if you’re not sure you’ll be living in the area for more than a few years, it may be better to continue renting vs buying in Naperville.
5. Housing market conditions: When considering buying a home in Naperville, it’s essential to evaluate the current housing market conditions and how they impact how much house you can afford. Understanding whether it’s buyer’s or seller’s market can help you gauge competition – and help adjust your expectations. Currently, Naperville is in a seller’s market, meaning there are more buyers looking to purchase a home than there are homes on the market.
If you’re unsure whether you’re ready to buy, consider consulting with your real estate or financial advisor to fully understand your options.
Is it competitive to buy a home in Naperville?
We’re seeing less inventory in the Naperville market, making home buying competitive. It’s common to see multiple offers on properties, and a home’s time on the market to be short before it goes under contract. This is especially true when it comes to homes that are under 20 years old or were recently renovated to trending styles. Offers typically include over list price, appraisal waivers, and as-is or waived inspections. With high interest rates, we have also seen an increase in cash or large down payment buyers.
Advantages of renting a home in Naperville
Maintenance costs and availability
Just as home prices have risen, so have the costs of contractors and materials. If you have home maintenance that you want to complete, it can be more costly and take a while to find a contractor. Renting helps you avoid these additional costs, as many of these costs will be covered by your landlord.
Easier to move on from a property
Leases typically have an end date and tenants can choose to leave when following the cancellation terms of the contract. This allows tenants a little more flexibility to “get up and go” without the uncertainty of selling their investment as they don’t own the property.
Disadvantages of renting a home in Naperville
Renewal changes and rent increases
Typical leases have a set time of expiration, whether it’s 6-months, 12-months, or month-to-month. When your lease ends, your landlord has the ability to end the lease, make modifications to the lease, or change the charges of the lease. This can leave you having to find new living options or increase in your monthly expenses to continue to live in the property. In addition, some leases allow cancellations prior to the lease ending, which may have a renter trying to find a new option of living quicker than they anticipated.
Limitations to design
When renting, you’re paying to live in the landlord’s property. Therefore, there are typically more restrictions to using their property. This usually includes many limitations on personalizing the space such as type of flooring, painting, light fixtures, etc. This makes it more difficult if you want to add your own touches to make the home feel more like your own.
Renting vs buying in Naperville: A real estate agent’s final thoughts
I personally believe there is never a “bad” time to buy a home. The biggest focus should be to review your main goals for buying to identify if it’s a good time for you specifically. Ask yourself – How long do I see myself in this home? Do I have an interest in renting it in the future?; and if so, is the property rentable? Does this home fit all of my needs? Can I take on the disadvantages of buying a home? If you’re finding answers to be more yes than no, it’s a great time for you to buy.