These days the buzz word is that it’s a great time to buy. But deciding whether to rent or buy is an individual decision that should be considered on a case by case basis. It is not wise to buy just because someone tells you that it’s a great time to buy.
What are some of the factors to consider?
- Your income and expenses. This is number one on my list.
- Falling equity in current homes. Homes are losing and continue to lose their value.
- Rent is cheaper: In most cases this is true. Renters do not have to pay for property tax or home insurance.
- Benefits of home ownership: There are many benefits such as building equity and tax breaks.
Some smart moves to make right now:
If you’re still unsure of what to do, consider using a mortgage calculator to help you determine the costs of home ownership. Bankrate.com has great calculators that can help you with this assessment. Another option is to consider the price to rent ratio. This is determined by dividing the price of a home by the annual rent you’d pay on a comparable home. If your answer is 15 or higher, than it is better to rent.
What are your thoughts?