Friday, November 22, 2013

Renting Versus Buying

11/22/2013

Many of us are in love with the dream of homeownership but should you really buy, or is it smarter to rent? Although there are always factors out of our control which can make home ownership risky (like major repairs, a down housing market).. there is a calculator by bankrate that allows you to determine at what point its smarter to buy than to rent. http://www.bankrate.com/calculators/mortgages/rent-buy-calculator.aspx

The option to buy or rent is highly personal though, so lets look at the pros and cons of each.

Renting
1) Landlord usually does maintenance
2) Ability to move more freely (even if you have a lease many landlords will let you terminate early)
3) Less risky
4) Less upfront costs


Buying
1) Build equity ( you are no longer "throwing money away on rent" )
2) Customization
3) Tax breaks
4) Roots
5) Security- rent isn't going to increase!
6) Your own Rules
7) No Pet Fee's, Pet Rent, or Pet Restrictions

If you have read my other blog entries you know that I can't wait to buy! I know there is some risk especially since we may be moving in two years... but I have found a couple houses that I believe would be good to buy even if we did move because A. the price is great B. they are in a good location and C its hard finding a place that will accept our dog. Using the bankrate calculator I determined it was much cheaper to buy then to rent, in fact it would be a better move financially for us in less than 10 months! Many cities its cheaper to buy than to rent, what prevents people is being able to get together money for a downpayment.

What is your opinion? Did I miss any pro's or con's? I left neighbors out because you can get crappy ones no matter where you live, I know from personal experience but I also have good ones!