At least it’s the question of many a potential First Time Home Buyer. I’ve had home “lookers” question whether or not I’m a real estate agent when I don’t automatically tell them to buy instead of rent. Well, I’m watching out for you, not myself. As far as I’m concerned, that’s a win-win.
So, how do you decide? It’s really a matter of time and money (aren’t so many things in life?):
– How long do you plan to stay in the area? The flipping days – or should I say days of flipping – are over. It’s always been the case that real estate is a long-term investment. The bubble was just that, and a lot of people are hurting right now. So, if you’re only here for a short time, or just aren’t sure, stay a renter for now.
– Crunch the numbers. (I told you I’m a stats geek). Run the spreadsheet. If you don’t like doing this, let me help you with it. Compare your rental costs to a mortgage payment. Factor in annual hikes in the rental cost. On the homeownership side of the equation, be sure to factor in the tax savings from home ownership, which is absolutely huge. If you get a conventional loan, your payments are going to remain constant, so no annual rent increases (though taxes may increase somewhat over time). The other advantage to owning instead of renting is appreciation — your rental money goes nowhere that helps you, it does help your landlord pay his or her mortgage while the value of that property is appreciating over the long term. Put that money into your own mortgage payment, enjoy the tax savings, and know that you’re building equity while the property is appreciating over the long term. But of course you can’t do that unless you’re staying put.
Make sense? Please let me know if not.
Have a great day!
<IMG style=”WIDTH: 175px; HEIGHT: 98px” height=111 src=”/images/99168-91904/logo_with_clear_background_good_for_website1.gif” width=276 border=0>
So, how do you decide? It’s really a matter of time and money (aren’t so many things in life?):
– How long do you plan to stay in the area? The flipping days – or should I say days of flipping – are over. It’s always been the case that real estate is a long-term investment. The bubble was just that, and a lot of people are hurting right now. So, if you’re only here for a short time, or just aren’t sure, stay a renter for now.
– Crunch the numbers. (I told you I’m a stats geek). Run the spreadsheet. If you don’t like doing this, let me help you with it. Compare your rental costs to a mortgage payment. Factor in annual hikes in the rental cost. On the homeownership side of the equation, be sure to factor in the tax savings from home ownership, which is absolutely huge. If you get a conventional loan, your payments are going to remain constant, so no annual rent increases (though taxes may increase somewhat over time). The other advantage to owning instead of renting is appreciation — your rental money goes nowhere that helps you, it does help your landlord pay his or her mortgage while the value of that property is appreciating over the long term. Put that money into your own mortgage payment, enjoy the tax savings, and know that you’re building equity while the property is appreciating over the long term. But of course you can’t do that unless you’re staying put.
Make sense? Please let me know if not.
Have a great day!
<IMG style=”WIDTH: 175px; HEIGHT: 98px” height=111 src=”/images/99168-91904/logo_with_clear_background_good_for_website1.gif” width=276 border=0>
