Buying Versus Renting

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Which is better?  Buying or renting.  Nearly nine times out of ten, it is best to purchase a home.  If you are renting a home, then likely you can afford to purchase.  There are only three conditions when renting is better than buying which are:

• Your rent is below average and you expect it to stay like that.
• You do not plan on being in the same location within a few years.
• The housing market is extremely expensive. 
• The cash that you would invest is yielding better than average terms.

Each person’s situation will vary and the choice to purchase a home over buying is a personal choice.  Generally, experts say to times the amount of your monthly rent by 240.  If you are able to purchase a home under that, then the purchase of a home is typically better in the long run.

The New York Times reports that buying is better than renting after five years.  Consider your five year plan.  Home ownership provides security, a significant tax advantage, and financial stability. 

It isn’t just a matter of purchasing a home.  The home should be in a good location to ensure its investment. 

Pros and Cons of Buying Versus Renting

Buying

• With the purchase of a home you are building equity.
• Purchasing means a significant tax deduction.
• Emotional satisfaction.

Renting

• Renting a home provides you the flexibility to easily relocate.
• ‘Renting allows you the ability to invest in other areas.
• There’s no upkeep with rentals.

If you do decide to purchase a home, then your best to put a down payment on the home.  However, if you don’t have the down payment, this does not have to stop you from the purchase of your first home.  Your Realtor® will be able to help you with all your options.