Rent Or Own- Advice for Buying or Selling your homes

The recent home mortgage meltdown have driven home prices down to record numbers.  You might have considered moving out of the house to look for homes for rent or seeked out rent to own homes in the market.  Perhaps you’ve waited for awhile to refinance your home, or thought of buying a smaller house.  Whatever the case may be–here are questions to ask yourself before making a decision…

Would I get more for my money renting versus buying?

– Basically, the answer depends on where you live and current mortgage rates.  There are more rentals these days as many people have had a hard time selling their homes, therefore, renting them instead.  Also, buying repossessed or bank owned homes have risen in numbers in recent years for which you may be able to buy a great house for relatively cheap.

I need cash on hand, best tip?

– “If you’ve got all your money locked up in a house, you’ve got all your money locked up in a house,” says Russell Wild, a financial adviser in Allentown, Pa., and coauthor of One Year to an Organized Financial Life.  Investing in real estate and having adequate liquidity in order to live comfortably is more important than ever in today’s uncertain economy.  Thus, if you’re having trouble living with Social Security , pension or other savings…then it might be better now to sell your home to get a reasonable return  rather than wait later and be forced to sell it quickly if the market turns for the worse.

Are you factoring in all costs?

– When deciding between renting versus buying, make sure to include all the costs.  For example, compare the price of a house you bought the first time around and its current value presently.  Then if you factor in the cost of mortgage interest, taxes, insurance, repairs and maintenance since buying that house…you might be surprised at how much money that you’ve actually lost as an expense overall.  Again, make sure to include all costs when making decisions to buy, sell, or rent.

What’s the ups and downs of renting/owning a home?

– You take a risk when renting with the following reasons:

  • Your landlord could get foreclosed on, or leave town, and sell your place
  • Your landlord may increase your rent when it is lease renewal time
  • If you’re a pet owner, you may have trouble finding a place to live with your furry one.

– When owning a home, you might face:

  • Your property taxes may vary year to year and you may be affected by property value fluctuations in the local market.

– On the bright side of things:

  • You can have the garden of your dreams or have wallpapers put-in when you own a home
  • Renting gives you the freedom of not having to pay the mortgage on a house you’re not living in or worry about watering the lawn.  In addition, this upside: If you don’t like the neighbors, you can move out once the lease is over.

So, keep those tips in mind before you buy a house, rent, or rent to own a property.

Credit source: Rent or Own- What’s Best for Empty Nesters? by Leslie Pepper (AARP Bulletin) Dec 22, 2010.

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