Why You Should Rent and NOT Buy a Home
Posted on | December 19, 2008 | 5 Comments
Over my 26 year life, I have never heard anyone say that you “should” rent instead of buy until yesterday. It has been accepted over the last 60 years that it is a strong investment to buy a home in the United States. The value of a home has appreciated at a greater rate then most investment vehicles. In today’s housing environment, that is not the case. Some California and Nevada homes have decreased well over 50% in value in a little over two years. With that knowledge, it now looks like it is a wiser decision to rent then own when speaking from an investment perspective
Investment opportunities aside, there are several other reasons one should rent and not buy a home. These reasons include
- You don’t want to bother with home maitenance or repair
- Rental rates are often low when compared to home prices
- With a global marketplace, you plan on moving around
- Prices of homes are in a bear market
- Ending a rental lease is MUCH easier then getting out of a mortgage
- Your credit rating is not where you want it
- You were burned in the housing market previously
There are many reasons why most Americans feel they should buy a home, but in this economic environment, they should also consider renting for the previous reasons. Do you rent or own a home? Which do you prefer in today’s economy?
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5 Responses to “Why You Should Rent and NOT Buy a Home”
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December 19th, 2008 @ 9:51 am
[...] Random Feed wrote an interesting post today onHere’s a quick excerptOver my 26 year life, I have never heard anyone say that you “should” rent instead of buy until yesterday. It has been accepted over the last 60 years that it is a strong investment to buy a home in the United States. The value of a home has appreciated at a greater rate then most investment vehicles. In today’s housing environment, that is not the case. Some California and Nevada homes have decreased well over 50% in value in a little over two years. With that knowledge, it now looks like [...]
December 19th, 2008 @ 11:34 am
If you plan on going to a higher pay status and you are able to purchase a home within what you would pay to rent, it would be a greatt Idea to buy a house.
You can qrite off the interest paid to mortage as well as medical bills and many others that I will not get into.
If you rent IRS takes your money at the highest rate it can and at the end of the year you don’t own anything.
With the rational thinking you offer why not rent your clothes and all your belonging I.E. T.V. stereo,frig….makes more sense to own iot and secondly most rents will go up yearly and your mortage will not. glenn
December 19th, 2008 @ 6:54 pm
I think renting should be encouraged because it strengthens communities. Flexibility is more important for the creative class than financial stability, which is illusory at best anyway. People are willing to pay more in the long term for less stress in the short term. Stress is very expensive, and house ownership, especially buying and/or selling, is extremely stress-inducing. Renters can have much more time and energy to enjoy their lives. People who can and should will always be buying homes, but why the push that everyone needs to? The most interesting places to live are more likely to be populated by renters.
December 20th, 2008 @ 11:52 pm
Interesting advice. I agree that getting in and out of a mortgage is much more complicated and cumbersome than becoming a homeowner. You also don’t have the hassle of household upkeep or repairs. On the down side you do not have the tax benefit of owning a home. The first few years of home ownership allow you to write off your mortgage payments and receive substantial tax benefits. This is a buyers market, with housing prices being in a huge slump, so it’s not a bad time to buy a home. Interest rates are dropping to encourage economic stimulus, ie: get people to buy homes. The decision to purchase a home is a big one. I would never suggest someone make the decision based soley on interest rates. There are definitely benefits to home ownership, but residential real estate isn’t an investment strategy that will build wealth. If someone is interested in making money in real estate, commercial real estate is much more lucrative. But that’s a conversation for another post perhaps!
December 28th, 2008 @ 5:15 pm
I believe you should do what makes you happy and comfortable. If more people thought about their home purchases and not the interest rate, everyone is doing it, and/or I must be able to afford this the bank loaned me the money. There’s nothing wrong with renting, if you have not received a raise in a long time or your laid off adjusting you rent payment by moving to another unit etc is a option. I have many friends now who are about to loose there homes because they focused on the dream of home ownership not the reality. There is nothing wrong with home ownership, but if your renting and you have money saved, bills paid on time and no maintenance dept renting can still be a good choice.