After dealing with some very opiniated comments from readers of my Newspaper Blog, I decided I would post the presentation that I use to help people decide whether to Rent a Home in Tallahassee, or whether to Buy a Home in Tallahassee. Here is what I posted on my other blog:
Tallahassee Real Estate: Rent or Own?
Do you ever wonder whether or not it is better to rent versus owning your own home? This question comes up from time to time, and with all the negative news about the real estate market, we have fielded this question quite a bit lately. As a matter of fact, a very opinionated commenter to this blog (going by the name "Anonymous") said it was definitely much better to rent than own.
I personally take a more analytical approach to this. You can set-up a simple spreadsheet in Microsoft Excel and analyze pertinent information in order to make a decision. So, do you Rent in Tallahassee, or do you Buy a Home in Tallahassee? Here is how to decide:
First of all, if you know you will be leaving the Tallahassee Real Estate Market in the next two years, renting is probably a better option. It is hard to take advantage of home ownership if you have to sell right away. But if you are like most and will be here a while, you need to gather a few facts.
- What home do you plan on renting
- What home could you buy as an alternative
- What is the rent on the first
- What is the purchase price on the second
Now you take the information you gathered and place it in a spreadsheet like below to get your answer. The example I used is someone looking to rent for $900 per month, or purchase a similar property for $120,000.
Notice the "Hidden Values" in ownership, like interest deductions on your taxes and long-term appreciation. While neither of those will be realized on a monthly basis, you definitely will see them over time. Owning real estate is a great "forced savings program" that has been the greatest source of wealth creation for our population.
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Joe Manausa, MBA, CRB, CRS | Broker / Owner | Century 21 First Realty
2365 Centerville Road | Tallahassee, Florida 32308 | 850-386-2001 | http://www.manausa.com/
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