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Wednesday, August 12, 2015

Buy Versus Renting a Home

The choice between buying a home and renting is often dependent on the marketplace in which you live as well as your current circumstances. Here is a list of factors that will help you determine what is best for you.

Do you plan on staying very long?

Those who plan on putting down some roots in a location for a while will fare better to buy, as any upfront fees will be spread out over many years. But if you’re not ready to commit to an area, think you might need to move in the near future, are considering a job change, or expect a pay hike or pay cut, renting may be a better choice.

What is the Economy Like?

The price of homes, rents and stocks can impact the outcome of when you decide to sell a home. Unfortunately, these are some of the hardest things to predict. But in general, even in down markets, a home is a good investment if you plan to stay for a while.

What is the Price of Rent?

What is the price of rent each month versus the cost of monthly mortgage payments? If you live in a city where making mortgage payments is less than rent, it is better to buy.  Currently in the St. Louis, MO area it is less expensive to make mortgage payments than to rent.


Taxes

You can deduct mortgage interest as well as property taxes on your home at tax time. The higher your marginal tax rate is, the bigger the deduction. In addition, if you work from home you may be eligible to take deductions home office and a portion of utilities. Renters do not get this privilege.

Maintenance and Decor

If you live in a house, you can decide how to approach maintenance, either doing it yourself or picking your own contractor. Also you have creative control. Paint things how you like and hang as many pictures as you want.

Equity

Renters are paying their landlord’s mortgage and adding equity to their property.  When you buy a home you increase your degree of ownership with every payment. A general rule is that if you intend to stay in your property for at least five to seven years, the costs of purchasing the home are more likely to be offset by accrued equity and increased housing value. Enough equity in a home can be used as capital to make major purchases like funding a second home or your child's education.
                                                                       

Credit Repair

If you have bad credit it can be difficult to obtain a mortgage loan to purchase a home. However renting and making consistent on-time payments will help rebuild your credit.

Find a Home to Buy or Lease

We hope this article helps you make an informed decision on whether renting or buying a home is right for you. Search homes for sale and for lease in the St. Louis and St. Charles, Missouri areas at our website,  www.TheBoehmerTeam.com.  

1 comment:

  1. Good tips. I think buying a house is better than renting it. But it still depends on the budget. To share my experience, I think I'd made a good decision back then when I bought my home near Bonifacio High Street.

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