In todays market the question actually seems to come up more often than before..”Is it better to Rent or Buy”?

Even with the great loss in home owners equity the answer hasn’t changed. Let me explain. Most people who are renting only consider the difference between the amount of their monthly payment vs the amount of a house payment..if the rental amount is less..then that is how they feel they are doing as well or better than a home buyer!

Of course each person has a different tax profile and should consider talking to their accountant..in most cases you can normally reduce your withholding taxes because the interest on your mortgage is tax deductible. Locking in a fixed monthly payment for 15/30 years is the key. Rent payments tend to keep pace with the economy and inflation. If you calculate your rent payments over 20 years with a 2.82 percent inflation rate, your rental payment would have increased from $1,000 per month to $1564 per month..where a comparable fixed mortgage payment would have stayed steady and you wouldn’t have payed out an extra $6768. per year paying rent!

Of course, there are other costs of homeownership to consider, such as home owners associations property taxes and utility bills.

So..for some individuals, this may be the best reason to purchase real estate. If you hold your porperty for long term, it will normally keep pace with inflation creating you additional wealth. If you rent, you pay off your landlord’s mortgage and make him or her wealthy. This may be one of the best reasons that homeownership remains an American ideal ..and the norm.. It may also explain..why Lowes and Home Depot and the rest of the DIY stores “are there for you”..not to mention all the “honey do” lists that are created by homeownership..if you deduct those purchases from your estimated increase of wealth..you might find yourself just breaking even with renting.. but you will have all that satisfaction of working on your house each weekend instead of playing GOLF!
(some information quoted from Bernice Ross, Inman News)