SHOULD I BUY OR RENT? (PART 2)

Last week we explored some of the financial advantages of renting.  Today we shall look at the financial advantages of buying.

Buying a home is by far the single biggest investment an individual or family will make. What are the advantages of buying in both the short and long term?

1. Buying gives ownership and control of the property.  Your home is an asset, while your mortgage is a liability.

2. Buying builds equity.  Equity is the difference between the market value of the home and what you owe.  You can utilize the equity to remodel your home, pay college tuition, or even provide a vacation for your family.

3. Buying gives you a tax benefit - you can deduct your mortgage interest and property tax payment.  Also you can deduct the capital gains from selling the house from taxable income if you maintained the property two of the last five years.

4. You can improve your home any way you want.  Remodeling, renovation and decorating are within your control.  

5. The buyer experiences fewer restrictions, unless you live in a deed restricted community or are subject to Home Owners Association rules.  

6. The homeowner can achieve a better credit rating through timely mortgage payments. 

Okay, there you are.  The advantages of buying a home as opposed to renting.  But before you decide one way or the other, let's pause and ask an important question - "Which route is best for me - buy or rent - and my current financial situation?" 

That is a topic for another week...see you then.