Property and finance blog

The following article on whether to rent or buy taken from Go Articles is worth a read:

There are so many factors affecting where you and your family should decide to call home. You should consider the location or type of home, but you also decide if it is better for you to rent or to buy a property.

 

Many people in America make assumptions about what they should do without really thinking about the conditions of renting versus buying. When renting a house, apartment, or property, you usually have to signa lease that requires several things.

 

For one, there will be a fairly fixed cost of monthly payments for the term of that lease, and when the lease is over, you can move to another location quite freely without having to worry about selling the home, and usually, the cash amount (or liquid assets) needed to sign a lease are very small, like deposits and utility start up fees.

 

In addition to these things, renting can be viewed as a safe decision. Though you will not gain equity, you will not loose any either. The value of the property is really no concern of yours, and some may find this a simpler circumstance.

 

However, you must realize that no matter how much the value of the home might increase, you will never gain equity in that property. This may be a "hindsight is 20/20" kind of scenario. When moving to a growing area with a vibrant economy, odds are, the value will increase, if not in the short term than in the long run.

 

Also, as a renter, you will have no income tax advantage because you do not own the property. One more issue to consider when thinking about renting is that you are not responsible for any maintenance in most cases, but while this may be nice, you are also very constricted as to how you might want to remodel or decorate.

 

The renter is at the mercy of the landlord in this case. As you can see, renting is a quick and simple process, while buying a home should be considered a little more carefully. Because of the incredibly varying prices of homes, there are often more possibilities and more factors to consider.

 

The main advantage to buying a home is that the money you spend on monthly payments is no longer completely gone. Every payment you make adds to your equity in the house (after interests are accounted for) so that it is similar to putting your money in an investment every month.

 

If you considered the payments like stock shares, and then the value of the house increases, each of those payments now has a greater value than what you paid.

 

Now your "stock" is worth more than you paid for it. This is the reason so many people make their living from buying and selling properties. Similar to day traders, real estate investors make money on the rise and fall of the real estate market.

 

Over time, even if the value of the home does not increase,the mortgage balance still lowers and the equity continues to build. Another thing to consider when buying a home is the maintenance.

 

You must do all of the maintenance yourself, or you pay for it to be done. At the same time, any improvements or decorating is entirely up to you, the owner.

 

These are just a few simple things to think about when you are first thinking about relocating your family. Of course there are many other factors to consider, but this information will help you more knowledgeably begin the search for what you and your family need at this point in your lives.

 

About the Author: Richard Seifried is the owner of Century 21 Eddleman Realty, the leading agency for Statesville NC real estate. For more information visit www.c21eddleman.com