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Rent Or Not To Rent: The Pros & Cons Of Renting Or
Buying |
Most folks interested in real estate have been led to believe that BUYING
property is the only way to go; building equity and reaping tax
benefits appear to be the only considerations in many cases.
The truth is there are advantages to both buying AND renting.
According to an article in The San Jose Mercury
News (February 14 th , 2004 sec. G), buying a home makes sense for
people who:
• Plan to stay in there homes
for at least two to four years
• Can afford the monthly mortgage payments, insurance
and property tax fees
• Are reasonable sure their income
and/or employment are secure
• Are ready to accept/absorb
repair and maintenance costs
• Are aware that home ownership
may mean compromise, in that the home you can
afford may
not be as big as you want or its' location may not be where
you want
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In general, renting is a
good idea for those who:
• Think they may want
to leave the area in less that two years
• Like the flexibility of being
able to move easily (think frequent job relocation)
• Like
the lack of responsibility for major upkeep and maintenance
• Don't have the cash flow for mortgage payments,
insurance and property taxes
• Don't want to or can't reduce other
high cost monthly obligations, like frequent travel
or private school tuition
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Note
the lack of “No Down Payment” as a reason
to rent; with all the lender programs available to individuals
in all types of income brackets, virtually anybody can “get
in the door” of a home purchase.
People site various concerns for trying to buy over renting, including
the ongoing knowledge that SOMEONE ELSE owns your living
space.
Another obvious concern is the fact that, as a renter, you receive
nothing when you leave a dwelling.
These concerns, say financial
planners, must be put in prospective: think about
WHY you are choosing to live in a particular place
and weigh the financial benefits of both renting
AND buying before you decide which route to take.
Several “rent vs. buy” calculators
[ www.mortgage-calc.com ]
are available online to help you get ballpark figures
with regard to your best individual financial options. However,
it is always best to talk with a qualified accountant
or financial planner before you decide on the best
course of action for you and your family.
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