enters are often in a condominium, it almost always
quandary as to whether it makes sense to do so.
makes sense to continue
renting or buy a home. Buying a The biggest disadvantage of
home makes more sense, renting is the loss of value.
particularly when taking a Assume you rent a residence for
long-term view. Yes, even in the $1,000 a month and you live in
current hot real estate market. the residence for two years. You
will have paid a total of $24,000
Renting - Advantages in rent, a pure expenditure. The
$24,000 is simply gone and you
Renting can have a few advantages will have nothing to show for it
depending on the part of the other than the time you spent in
country you live in. The primary the home. Compare this to what
advantage is your monthly rent your landlord has gained.
payment may be less than an
equivalent mortgage. A secondary Rent payments are closely aligned
advantage is the fact that with a landlord's mortgage
maintenance and improvements to payment. Using the above example,
the property are the lets assume your $1,000 rent
responsibility of the landlord. exactly equals the mortgage
Still, these advantages pale in payment. For two years, you have
comparison to the disadvantages indirectly paid the landlord's
of renting. mortgage, helping them build
equity in the house by paying
Renting - Disadvantages down the loan. In addition, the
landlord has benefited from the
The disadvantages of renting are appreciation of the property.
significant. If you have any
opportunity to purchase a home or By appreciation, I simply mean
the amount of increase in the with similar financial figures?
value of the house. If the rental You would have seen an increase
appreciated $20,000 in two years, in YOUR wealth of $24,000, not
the landlord has received a the landlord's wealth. If you
windfall. They may have seen a renting, these figures should
gain of $24,000 in appreciation make your teeth grind.
and payments lowering the
mortgage. As a renter, you have If you are renting, you should be
made this all possible. The out shopping for your own
landlord no doubt would like to property. After all, isn't it
thank you. time to make your money work for
you, not a landlord?
Now, what would have happened if
you had purchased a similar home
About the Author:
Raynor James is with http://www.fsboamerica.org - an online site providing national exposure for sellers listing properties and a database of properties for buyers.
Source: www.isnare.com
