Renting or buying the real scoop

Talking with first time homebuyers the common question arises, "Is it better to rent, or buy?" I have always been fair with this question while I think REALTORS and financial planners alike are heavily on the side that buying is better. There is no question there are many advantages to home ownership.

Tax Savings: Interest and property tax are deductible on your Federal Income Tax return

Equity buildup: Your prinicipal is reduced over time growing your net worth (your personal wealth)

Investment: In a stable or growing market the home will appreciate in time (not guaranteed)

Pride of ownership: The property is yours to add on to, design, and enjoy with family and friends.

There is indeed a "cost of ownership" as well for the new buyer. Buying lawn mowers, trash cans, window treatments are not free. Paying homeowners dues and homeowners insurance is money out of pocket. What about new furnishings and home maintenance? Never underestimate all the new bills you will have. There is also that first cost of coming up with a down payment if you need one to get the house.

On the other hand, the advantages to rent to me come down to two things: time and lifestyle. Are you going to live there less than two years? To me that is a no brainer for renting just looking at the financial side. I CANNOT tell you how many people buy a house and move out in less than two years. With a closing on each end, and sometimes being in a depressed housing market, it's CRAZY. Second if you are a mobile person and don't know where you want to live, or want to have a lease run out and do something else, it makes perfect sense to rent. As a matter of fact I think you are a GENIUS with matching your lifestyle with your housing need. Also, maintenance can be someone else's problem.

So for all you renters out there - figure it out for yourself and stop listening to those financial planners. If they are all so smart, why aren't they living in million dollar homes? Renting has its place in society depending on your stage in life and your need for flexibility. BTW, REALTORS can help too, with finding you a place or putting yours up for rent. So give us a call too!