To Buy or to Rent...THAT is the question?

Today I begin this post covering a new series...To BUY or to Rent and I will cover the Top Five misconceptions to shed some light on whether you should take advantage of LOW interest rates, abundance of inventory, and Tax advantages. "They" say hindsight is 20/20 and I know in less than 2 years many people will look back wishing they had made the jump to homeownership rather than wasting money on rent. In today's market, many first time homebuyers mortgage payment would be less than rent in many apartments. It is easier than you think.

Misconceptions On Buying Versus Renting

While there are a number of misconceptions surrounding whether it is best to rent or buy, one of the biggest may be the notion that renting is simpler. For example, when the refrigerator in a rental needs repair, the responsibility falls on the landlord. When new homeowners sign their name on the dotted line, responsibility is theirs. Yet stating that renting is the “simpler” choice takes a narrow view of the total set of questions and issues that go into the
buy-versus-rent decision.

Here are a few of the misconceptions relative to buying versus renting:

Misconception No. 1
The tax benefits derived from purchasing a home takes forever to offset all the other costs involved.

The Reality – Most people know that tax write-offs of mortgage interest are among the biggest financial benefits of home ownership. But some people question whether this benefit is really great enough to offset the “big picture” cost of ownership – including the hefty down payment and closing costs needed to get a former renter across the threshold to homeownership.

Homes typically appreciate in value over time – at the same time the homeowner builds his or her equity in the property through monthly mortgage payments. Though tax offsets begin right away (really starting to “pay off” in that first tax filing season after a home’s purchase), the bigger picture benefits tend to come with time.

That’s why potential homebuyers should carefully evaluate how long they expect to stay in the home that they are considering purchasing. If they anticipate staying in their first home only one to two years – especially in today’s market – they’re not as likely to get a good return on their initial investment. If, on the other hand, they are planning on staying several years in the same property, the scales of benefit start to shift – and the value of all that they gain financially from homeownership is likely to outweigh those initial costs to get in the door.

JOIN ME TOMORROW FOR MISCONCEPTION # 2! Stay tuned!