Rent vs Buy, That Is The Question For 2012

(You can watch a HD version of this Rent vs Buy video here)

 Today, let’s talk about what’s a better deal, to rent or to buy your home.

With the economy where it is today, and housing prices at such affordable levels the lure to buy your home is almost too attractive to pass up.  And throw in interest rates at almost historic lows you would think this would be a no brainer.

But it’s not.

When you rent a house, you know what the costs are.  It’s real simple your obligations start and end with your monthly rent.  If the plumbing breaks, no biggie, that’s the landlords responsibility.  Property taxes, Landlord.  Variable interest rates, not for you.  And all of the other expenses…not yours.

rent v buy subdivisionSounds pretty good…But…there’s a flip side.  When you own a house, yes, you are responsible for all of these expenses.  But you also get to enjoy the major benefit of home ownership and that is the appreciation in the value of the house.  If you can sell the house for more than you bought it, then that’s your money to keep.

There’s also some less obvious benefits to ownership including the tax write-offs on mortgage interest and if you’re renting it out, the potential for cash flow and rent increases.

So looking at it from a purely monetary point of view, when is it better to buy a home rather than rent one.  Well it turns out that, while it is dependent on where you live, that for more than 75% of the Country, 3 years is the magic number according to this report from Zillow.

Bottom line, if you plan to live in a location for less than 3 years it is better to rent, and if you think you’re going to be in for the long term, or at least more than 3 years then you’ve got the green light to buy that house and be money ahead.

Of course if you find yourself on the buy side of this equation, then make sure to take the actions necessary so that you can qualify for those historic low rates.  Check here to see where you currently stand, and if you’re having some trouble make sure to take our FREE Credit Secrets video course to help get you on the right track.

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About Anthony Candella

Anthony is the founder and Directing Attorney of YourCreditAttorney.com and has been helping consumers just like you understand and improve your credit and financial situation since 2003.

  • ugg_ugg

    You pay for the home you occupy whether you rent or whether you buy.
    Merry Christmas.