SHOULD YOU RENT OR BUY YOUR NEXT HOME?

Privacy, proximity to family and friends, ambiance, environment and a sense of community all contribute to the emotional side. Tax breaks, transportation, amenities, and the opportunity to build equity are also factors. But the number one reason people buy homes is the desire to own a home, with the desire for more space a close second.

For most households, renting is less of a financial stretch than buying a home. Even in the best of times, homeowners must come up with a substantial amount of cash to cover the downpayment and closing costs, as well as be prepared for upcoming repairs and maintenance. While renters typically have to pay a security deposit plus the last month's rent, the total outlay is usually more modest than the upfront costs of buying. Equally important, renters who want to move do not incur the steep costs associated with selling a home.

Renting also brings greater certainty to household budgeting because tenants do not have to cover the costs of unexpected but necessary home repairs. Owning a home, however, requires money, time, and skill to manage its upkeep. Renting transfers responsibility for maintenance to a landlord, reducing risk and worry for those who prefer to avoid these obligations.

Beginning in 2009, the edge began to move to homeownership. Due to still-low home prices and rising rents, The Center for Housing Policy predicted that home buyers who purchase can build equity within four years, about the same length of time it takes to recoup closing costs. The reason building equity is important is that you can take money out of the home when you leave, which is not possible for renters.

One of the disadvantages of renting is that rents can go up. If you get a fixed-rate mortgage, your costs will stay the same, although hazard insurance and property taxes can rise. However, rental insurance can rise, too.

Renting is a convenience and a great hedge when property prices are spiraling downward, but for long-term gain, tax benefits and equity is a better bet.

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Privacy, proximity to family and friends, ambiance, environment and a sense of community all contribute to the emotional side. Tax breaks, transportation, amenities, and the opportunity to build equity are also factors. But the number one reason people buy homes is the desire to own a home, with the desire for more space a close second.

For most households, renting is less of a financial stretch than buying a home. Even in the best of times, homeowners must come up with a substantial amount of cash to cover the downpayment and closing costs, as well as be prepared for upcoming repairs and maintenance. While renters typically have to pay a security deposit plus the last month's rent, the total outlay is usually more modest than the upfront costs of buying. Equally important, renters who want to move do not incur the steep costs associated with selling a home.

Renting also brings greater certainty to household budgeting because tenants do not have to cover the costs of unexpected but necessary home repairs. Owning a home, however, requires money, time, and skill to manage its upkeep. Renting transfers responsibility for maintenance to a landlord, reducing risk and worry for those who prefer to avoid these obligations.

Beginning in 2009, the edge began to move to homeownership. Due to still-low home prices and rising rents, The Center for Housing Policy predicted that home buyers who purchase can build equity within four years, about the same length of time it takes