To Rent or to Buy That is the Question

Should you rent your home, or should you purchase it? This is a difficult decision, and there are many factors involved in determining what is your best option. Every consumer should carefully consider all of the pros and cons of both options before coming to a conclusion.

Renting, in general, costs less than purchasing your home. When buying a home you are subject to pay a down payment and closing costs. You will be subject to property taxes, and will be responsible for the cost of general repairs that you will need to make throughout your inhabitance. If you are renting your property, it is the responsibility of your landlord to cover these basic repairs. Maintaining the property is rarely your responsibility when renting. Another benefit of renting is that you are far less bound to your house. If you are renting your property, within the terms of your contract, you are able to move with much greater facility than if you are a property owner. If you own the house, you will have to wait until you are able to sell it, and will still have to face costs such as your mortgage payment.

There are, however, many benefits to buying your house. Firstly, being a homeowner gives you many tax advantages. You are typically allowed to deduct the taxes that are levied against your property tax payments, as well as the taxes on your mortgage interest. This can save you a great deal of money if the house that you are purchasing is particularly expensive, however anyone can claim a deduction on property payments, and an inexpensive property may not offer a worthwhile tax deduction.

Owning a house also allows you a certain level of advantage in borrowing money. Ownership allows you to borrow money as a second mortgage or as home equity. You can use this cash to finance other loans, keep up with the cost of maintaining your home, or any other aspect of your finances where you may need be otherwise lacking. While you are not able to borrow against the total value of your house, you can often borrow up to 80 or 90% of the property's value.

One of the principle benefits to owning a house is the possibility of making money. If the property increases in value, you will reap all of the profits, even if you borrowed money to purchase the house and thus only own a percentage. When you sell the house, you may find yourself making a fair sum of money! If you please, as a homeowner, you can upgrade the value of your property by renovations. If you are a renter you will be required to obtain permission before making any changes to the state of the property. Furthermore, as a renter, you are often at risk. Your landlord has the right to evict you if you are in violation of the rules laid out in your lease, and can be out of luck should the property be sold or should your landlord die.

To make the best decision, consider these factors and how they pertain to your own personal and economic situation. Certain benefits of renting or buying will be more appealing to you than others. Gather all the information about the terms of your rent or the terms of purchasing the house, and evaluate which makes more sense in consideration of your own needs.

Regardless of whether you rent or own you home, make sure you have the right insurance coverage. Check out rates at www.getagreatrate.com.

©2004 The Lawrence Marketing Group

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