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Am I renting for the right reasons?
Added expenses and responsibility
When you buy a home, there is a great deal more responsibility and expenses that need to be taken into account.
While renting in most places, you write one check which wll cover all of the expenses of renting the house or apartment. When you
get into a house, you need to pay for and manage the water, electric, gas, phone, cable, trash sewer, as well as pay homeowners association
fees.
In addition to the added expenses and responsibilities, you also in most cases will have to pay for maintenance repairs to your house,
while when renting all of these maintenance issues are covered by the landlord or property manager.
Long Term/Short Term Committment
If you like to move around from year to year, or every couple of years,
renting may also be a viable option for you. When you buy a house, it takes alot more effort and fortitude to
put your place for sale, find a buyer, settle, all while trying to find your home of choice. Most people
who decide to purchase a home, plan on staying there for several years if not longer.
When you purchase a home, mortgages are generally for 30 years. Renting can either be yearly, or month to month, but either way at the
end of the lease you are entitled to get out of the lease with generally short notice. The only way out of a house you have purchased
is to sell it, or rent it to interested parties.
Tax Benefits
One of the major differences between renting and buying is the tax break, or benefits you receive from purchasing a home. Interest carrying
loans paid by the home owner are split into two categories, interest and principal. The interest paid is a write off which will entitle you
to a large tax return come April if you purchase.
Appreciation of Real Estate
While the homeowner is enjoying the tax benefits, they will also enjoy the benefits of thier home making them money from year to year. In
most situations from year to year, the housing market will appreciate. This has been such, especially in the last 5 years, where you have seen houses
in this market double if not nearly triple.
Summary
Deciding to rent or buy is not an easy feat. It depends on how complex your want your life to be, what stage of your life you are in,
as well as your financial stability, and long and short term goals. Before deciding to rent or buy, you should weigh your options,
and evaluate where you'd like to be in 5-10 years.
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