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Should You Lease Or Own Your Next Home?

By Marilyn Katz

Republish: EasyPublish™
Published: 04Oct2011
Word count: 606
Viewed: 111 time(s)

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Everybody used to see home ownership as one of their top goals. These days, with lower home values and an unstable job market, people are not so sure that owning a home is still attractive. Does it make sense to own or rent these days? Look at the upside and downside of buying your own house!

Owning a home does have some advantages. You may feel great pride in the house that you purchased, and you may feel like ownership gives you more status with your friends and neighbors. It can increase your sense of stability too. Beyond your pride, you may enjoy more privacy. You can also make decorating and painting decisions without asking a landlord for permission. These are intangible benefits of home ownership. They do not really translate into making you better off in the real world.

You must consider all of the costs of owning a house. Beyond your monthly mortgage payments, you will have other expenses. You should shop to be sure you are getting the best homeowners insurance rates, and paying reasonable prices for repairs. Also remember you will have to pay property taxes on your new home! While you can compare insurance quotes to try to get the best home policy rates, you probably cannot shop around for better property tax rates!

A few years ago, everybody considered a home purchase as an investment. They thought the asset would help increase their net work, and give them actual financial security. These days, many homes have dropped in value. The asset value of a lot of houses went from positive to negative. It may still be possible to purchase a new house as an investment, but this is not a sure thing any longer.

When you really add up all the costs of owning a home, it may hard to be justify buying a house as an investment. But we all need a place to live, and you will have to pay to own or rent.

If you rent a house or apartment, your main expense will be your monthly rent payment! Of course, prudent tenants probably also purchase a renter's policy. Some landlords may require their tenants to handle some basic upkeep too. But the costs of minor upkeep and renters insurance are much lower than the costs of repairs, upkeep, and a full home owners insurance policy!

You should also think about how long you expect to stay in your home. If yo do not plan to stay very long, you are probably much better off with a six month to year lease than a mortgage. If you do have to relocate quickly, it is usually much cheaper to find a way to get free from a lease than to sell a house so you can get out of a mortgage!

Do you think that rent is a waste of money? Some people say that paying rent is like throwing money down the draim. In my opinion, both home owners and renters pay "rent" to some degree.

There are expenses that home owners need to pay that do not really add to the asset value of their homes. These expenses, like insurance, taxes, and mowing the lawn, need to be handled even if they do not really increase your home equity!

Should you rent or buy? That is an individual decision. You will have to base your own choice upon your own situation, and upon your best guess about what the future holds.

If you decide to downsize to an apartment, make sure you understand the importance of renters insurance. Where will you live? Consider some cheap retirement places in the USA!

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