RENTING vs. BUYING “Should I buy or rent?”
Here are a few other misconceptions regarding the rent-versus-buy dilemma:
The decision to rent an apartment, condo, or house as opposed to buying is complex and requires great consideration.
There are many misconceptions when weighing the option to rent or buy. One of the biggest may be the notion that renting is simpler. When the refrigerator in a rental needs to be repaired, it’s usually the landlord’s responsibility. But when new homeowners sign the contract, the responsibility becomes theirs. Ultimately, stating that renting is the “simpler” choice takes a narrow view on the issues that go into making the decision.
The tax benefits derived from purchasing a home may take too long to offset other costs involved. Mortgage interest tax write-offs can be among the largest financial benefits of homeownership. Homes may appreciate in value over time, so if you anticipate staying for several years, the scales could tip in your favor, increasing the likelihood that the value of your equity will outweigh your initial costs.
Renting a home isn’t all that different from owning. There is one fundamental difference. Unlike equity built with each monthly mortgage payment, the rent you are paying is producing zero future financial benefit. Historically, most homes increase in value over the long term, so a home not only provides a place to live but could ultimately provide a return on your original investment.
If you rent now with the intention of buying a home later, prices and interest rates might be lower. Trying to “time the market” is typically considered a risky investment strategy. Buying a home should be approached as a long term investment, with the goal of building equity, cost appreciation and tax benefits over time. Many believe now is a smart time to buy because interest rates remain at historically low levels, coupled with rising prices in many communities. When purchased with the longer term in mind, housing may be one of the safest investments consumers can make.
It’s cheaper to rent. This may or may not be so. The challenging housing market experienced over the last decade caused many to forego or abandon homeownership and turn to rentals. This influx of renters impacted the demand for rental properties, driving rent prices higher.
By buying a home, I’ll be affected by the foreclosure mess. It’s important to remember that foreclosures account for a small percentage of all homes sold. While mortgage money is available for qualified borrowers, lenders have returned to upholding higher standards that will help prevent future foreclosures. You’ll need to demonstrate strong borrowing capabilities, such as proof of income, solid credit and the ability to make a significant down payment. It’s also critical that you become well-educated about the various mortgage options available and know what you can afford.
The debate can be overwhelming, which is why it is so important to educate yourself on the pros and cons of buying and renting.
If you’d like to explore your buying power in today’s market, contact me now. I can help you make an informed decision about buying or renting in today’s real estate market.
Let’s chat (305)498-1323 I will be waiting for you..!