One question that many people have to face at some point or another is whether to continue renting or to buy a home. The answer may be different for everyone, but there are some things you should know before making a decision. Some may feel that they cannot buy, that they are just not at that point in their life, but they may be a little farther down the road.
Whether to rent or to buy can cause some couple to fight. Everyone has their own opinion about it. It can lead to a big argument for some, or be an easy decision for others. Some people feel that paying rent each month is throwing their money away. Others feel that buying a home in an area where it is cheaper to rent is a very bad idea. So who is right?
There are a lot of factors involved when deciding whether to rent or to buy. First thing you need to do is to look for a neighborhood that you like and would want to live in. Then look through the area for a house that you like. Once you have done that you need to look at the pricing trends in the area. Is the value of the homes in the area going down? If so you are better off renting. Is the value of the homes in the area going up? If so you might be better off buying the home now before the value goes up even more.
Both renting and buying have their pros and cons. With renting you get flexibility to relocate whenever you want or need to. You can also invest money in other areas such as the stock market. There are also no upkeep fees, if something goes wrong you just have to call your landlord and have them come fix the problem.
With buying a home you get a tax-break; you can deduct mortgage interest and property taxes. You also get potential tax-free capital gain. Owning a home can also give you emotional satisfaction. These are the pros to renting and buying, but one must not forget the cons.
When renting you have no equity. Not only do you have to pay rent, but the annual rent increase could outpace inflation. This is a big deal for some, they may only have so much money, and when the rent increase does outpace inflation, they may not have the money to continue to live in that home any longer.
When you own your own home you have to pay property taxes and to upkeep the property, there are also mortgage costs that you will have to deal with. You also have less flexibility should you want or need to move, in very bad housing markets, you could lose principal if you have to sell to be able to move.
There are pros and cons to both renting and buying. It all comes down to what is right for you at this moment and what you can do. If you do not feel like you can take on owning a home at this point in time, then you should continue to rent. However if you feel that it is something you can handle and are ready for then you should buy a home.
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