Are you better off buying or renting a home?

Posted by Nicholas Vanikiotis & Group 1B

Homeowners are still tackling the question of whether they are better off buying or renting a home. This is especially true for first time homeowners. With the current state of the economy it is understandable as to why this is such a daunting issue for people. Purchasing a home is one of the biggest commitments people make in their lives and the pros and cons need to be laid out on the table.

There are several issues that need to be addressed when considering whether to purchase or rent. The first is can you handle the monthly expenses that come with purchasing a home. These include maintenance expenses, mortgage payments, property and school taxes, and utilities. Whereas when renting you do not need to pay taxes, thus your costs are dramatically reduced, but you may run into a situation where your landlord is not good at keeping up with property maintenance. So there are other issues that arise besides money. Also, the $8,000 homeowner tax credit is something to consider. This is something that has been a deal breaker for some people when purchasing a home because of the monetary aid the government is giving.

Considering your income level is also very important to see what exactly you can and cannot afford. A lot of time people are irresponsible with their money and overestimate what they can afford. A final thing to consider is how easy it is to move from a rental property. With a home purchase you have to find a seller and incur all kinds of transaction fees.
http://online.wsj.com/article/SB125158404267969691.html
http://www.ginniemae.gov/rent_vs_buy/rent_vs_buy.asp?subtitle=ypth
http://www.nytimes.com/2009/09/12/your-money/mortgages/12money.html?_r=1