ICFE eNEWS #12-17 - June 5th 2012
7 Reasons to Buy versus 7 Reasons to Rent
By Jim Garnett, a/k/a Ask Mr. G, a member of the ICFE's Board of Educational Advisors.
Is it better to buy a home or rent? The "right" answer for you depends entirely on your individual circumstances. That being said, here are 7 reasons to buy vs. 7 reasons to rent that will help you think through the situation.
7 Reasons You Should Buy
1. The home's "equity" (the difference between the value of the house and what you owe on it) often increases providing you with an appreciating asset and a down payment for your next home purchase.
2. The monthly payments can often be about the same for owning or renting.
3. There is a greater sense of stability, security, and community in owning your own home.
4. Homeowners can change the decor and landscaping to suit their own tastes.
5. Homeowners can do their own maintenance or hire it done without having to wait for someone else to "fix it when they have a chance."
6. Mortgage interest and property taxes are usually tax deductible.
7. Mortgage payments do not tend to increase like rental payments often do. Mortgage payments will increase due to the terms of a balloon mortgage, a refinance, or an increase in the escrow account.
7 Reasons You Should Rent
1. The initial rental deposit is much less than a down payment for a home and is usually refunded when you leave to apply on your next apartment.
2. It is much less difficult to move and much less costly.
3. The cost of furnishing an apartment is much less than a house.
4. There is little or no cost for maintenance, repairs, or upkeep.
5. There is no chance of foreclosure in which you can lose all of your investment.
6. Rental insurance and monthly utility costs are normally much cheaper.
7. There are no closing costs or realtor fees in renting an apartment.
© Jim Garnett, The Debt Doctor
AskMrG Consulting, LLC
2216 SW 35th Street
Ankeny, IA 50023
President - Executive Director
Institute of Consumer Financial Education (ICFE)
ICFE - Institute of Consumer Financial Education - ICFE.info - 619.239.1401