It can be difficult for many of us to understand when it behooves us to rent or buy a residence. Advantages and disadvantages are present in both scenarios, and it is hard to decipher sometimes what is your best option. To make the right decision, you really have to look at each individual scenario. Nevertheless, it is always better to know as much as you can when making the decision. Here is a brief guide and some helpful tools to help you navigate through this decision process:
If you are considering purchasing a home, you know that there are many reasons and purposes behind this motivation. Your reason to purchase can be because of family reasons, for extra space, or finally because it makes economic sense. When you are analyzing whether to rent or own, try to focus on the economics of the situation. Get the facts and perform your due diligence in regards to affordability, savings, and long-term financial ramifications. Then start pulling in other factors behind your reason or motivation to purchase, and finally make a complete list of all the pros and cons.
When considering a home purchase, you should try to look beyond the incentive to gain on your investment. Historically, the gains will on average be somewhat milder than what you could expect in the stock market or elsewhere, and you should think more in terms of building equity. The New York Times and other news publications have some great tools you can use to analyze the factors in home ownership and renting. These tools help you determine when it makes economic sense to purchase. Check out the tool from the NY Times to see what makes sense for you.
In addition to these tools, you should consider some other advantages to home ownership, like the ability to deduct parts of your mortgage interest from your taxes each year. Also, the ability to build equity over time and lock in a historically low interest rate are both great opportunities that come with home ownership. Of course, timing is always an issue here. Look back over 30 years or more, the average term of a mortgage, and look at historical mortgage rates to help in your decision. You can also consider adjustable rate mortgages. As a potential buyer, you will also want to think about how long you expect to stay in the area you are looking into for a home. If you think you might change jobs, or lose your job, or move soon for any reason, then taking on the closing costs and other home buying fees for a short period of time may not make sense.
As you can tell, there are many factors to consider when you think about home buying. However, I hope this information has been helpful, and I wish you all the best in your decision. If you are considering purchasing a home in 2012 in the Charleston, SC area, then don’t hesitate to reach out for advice and information on available properties. You can reach me via email, bob-chambers@infinityrealty.com, or by phone, 843-849-3005. The Charleston Real Estate market has some fabulous homes available right now that I’d love to walk you through. Get in touch with me today so we can take advantage of the favorable buying market! Talk to you soon!
Bob Chambers is Broker-in-Charge & Owner of Infinity Realty located in Mount Pleasant. Mr. Chambers is responsible for fostering relationships in the community, managing sales staff, heads office operations and helps clients buy and sell homes in the Tri-County area.