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Is it better to buy or rent?Tue, 11/07/2006 - 3:31pm
By: The Citizen
The market is ripe for buyers right now. Interest rates, although slightly higher than this time last year, are still at an all-time low, and the National Association of REALTORS® predicts that 2006 will be the third all-time best year in real estate. So naturally you should be telling your landlord goodbye and saying hello to your dream home, right? Not so fast. Certainly, owning your own home has its benefits. But, is the dream of homeownership really one you should pursue? It all depends on your circumstance and needs. Buying a home is such a large investment, possibly the largest purchase you’ll make. So, careful deliberation should be made when deciding which is better for you: rent or buy. As a homeowner, you have the benefit of security and stability, as well as the freedom to decorate and remodel. Your property also builds equity and you get the tax benefit. However, when the central heating unit breaks or the roof needs replacing, the repairs are your financial responsibility. And, there is always the possibility of losing on your investment if property values go down. One tool you can use in your analysis is a Rent -vs- Buy calculator that you can find on Web sites such Prudential.com. These calculators allow you to compare the costs of renting and buying. In some cases the amount you spend in rent may be about the same or less than you would pay on a mortgage. However, the tax benefit from owning the home may provide significant savings. Besides costs, another factor to consider is how long you plan to reside in the home. When you purchase a home, there is a substantial initial investment including the down payment, closing costs, and renovations. It typically takes between five and seven years to recover your initial costs. And depending on your loan payments, it may take a few years before you begin to see a return on your investment. Although homeownership has its benefits, make sure it’s the right fit for you depending on your financial and personal situations. Special to The Citizen Tori Lawson can be reached at (404) (918-4671). Prudential Georgia Realty is an independently owned and operated member of Prudential Real Estate Affiliates, Inc., a Prudential Financial company. Equal Housing Opportunity. (PLEASE insert the Equal Housing Opportunity logo here) www.torilawson.com login to post comments |