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Is Now the Time to Buy or Rent a Home?

Posted by : Premraj | Posted on : Thursday, December 17, 2009


Source: Craig’s shelter in solo isolation in the jungle

In the early 2000’s, the housing market was doing well and most people who bought a home during this time believed that their homes would be an investment. They assumed they would have a home that would appreciate. Unfortunately though, that was not and has not been the case. More and more homeowners who bought homes in the early part of this decade are finding that their homes are depreciating. Now they are finding it hard to find buyers for their homes.

With that thought in mind, it might be wise to be on the side of caution when considering buying a home. The first thing you might want to consider is how good your credit is. If you have bad credit, it would be in your favor to consider renting instead of buying, especially during a time with so much economic upheaval.

A lot of those owners who now are finding it difficult to sell their homes are willing to rent a home for a $1,000 a month that was worth over $250,000 when they purchased it. In this day and age, $1,000 a month is a far cry from the house payments and interest you would have to pay if you were to buy a home. Not to mention the large down payment that you would need up front to buy a home. You can get rental deals from homeowners that are finding it a difficult selling market and are at least wanting some income from their property.

These days, there are a lot of different benefits from renting instead of buying. You don’t have to pay interest, you don’t have to pay taxes, and it should give you the ability to be able to save money for the future, should the opportunity come up to buy a home in perhaps a better housing market in the future.

Another advantage to renting in this days market is the fact that you’re not going to run into any unexpected expenses forcing you to dig into any reserve funds that you might have. Remember once the monthly rent is paid, all obligations for repairs and maintenance is the sole responsibility of the owner of the property.

On the other hand, if you have very good credit, there would probably be an advantage to buying a home right now. The reason for this would be the fact that going prices on homes right now are much lower than they were a few years. The major advantage for those with good credit to own a home instead of renting is the fact that their monthly payment is an investment and not being thrown away as it is in renting a home. The homeowner also has the benefit that their monthly payments will not increase over the years, whereas the renter can probably expect an annual increase of 5%.

In the end, whether or not you buy or rent, will mainly depend upon just how good your credit is and whether or not you feel secure that your income, where it stands at the time of purchase, will remain the same for quite some time to come.

Comments : 1 Comment | Category : Mortgage, Personal Finance, Planning | Tags : ,

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