Posted on 08/10/2013 10:34:12 AM PDT by SeekAndFind
If you are a renter and pondering whether it’s time buy a home, one thing that might be on your mind is a rent vs. own analysis. As you can imagine, this analysis will help you determine the financial benefits of owning a home vs. staying a renter.
Many online rent vs. own analysis tools are available, but a little caution is needed, as some of these tools are very biased and skewed. Some always find that it typically makes sense to buy, while others show that you should rarely buy. Most of them look at the difference between the monthly rental and mortgage payments and take into account tax benefits, equity earned, sales prices and other variables associated with home ownership.
The biggest problem with most of these tools is that they are way too complex for the average person to understand. And because this is the biggest financial decision you will ever make, it isn’t a smart idea to just trust, while not understanding, what’s behind the analysis.
But there is a simple way to do a rent vs. own analysis that will return the correct decision the vast majority of the time for the average home buyer. And it’s completely unbiased.
(Excerpt) Read more at businessinsider.com ...
SIMPLE DECISION MAKING PROCESS:
Ask yourself: Am I very confident that I will own the home at least five years?
If the answer is yes, it probably makes sense to buy because it will improve your net wealth.
If the answer is no, you should stay a renter because owning will most likely diminish your net wealth.
That’s it, the math is just that simple!
CLICK ABOVE LINK TO UNDERSTAND WHY IT WORKS...
to me, it was always a matter freedom to able to do with my living space as I see fit... repaint vs putting in paneling, getting rid of my H2O tank for an on demand system, putting in a coal stove, adding a deck, whatever, it's my choice to make not the landlord's
bump
Also for consideration is the ability to pay your property taxes and school taxes. I think having those taxes are wrong and communistic, your property should be yours and your family’s forever but that is a little OT for now. Let’s put it this way, try not paying those taxes for 5 or 10 years (maybe less) and then you’ll see who really owns the property. Sometimes it is better to rent and not worry about taxes and in some cases, utilities although if you have a bad landlord, it can come back and haunt you. There is a side of me that I think living like a turtle would not be bad. Buy a 1960’s era Mercury Park Lane and a bullet trailer and just take my home where I go. I also saw a Soviet Army radio truck for sale, stuff a cot and bathroom/shower inside and instant home for a ham radio operator like me. B-) The downside is if you have kids but it might be good for a single person or a couple.
Do you want to pay your own mortgage or someone else’s?
Don't kid yourself. Those taxes are included in your rent.
The biggest variable of them all is the future of home values, and that can’t be determined by any online tool.
/johnny
If you wish to control your own environment buy.
If you wish others to control you and your environment rent.
The mathematical excercises are mere details.
Deporting all the illegals whom we’re having to give a “free” education would cut those property taxes in half. Getting illegals off our roads and other tax payer infrastructures would eliminate the need to build more roads, etc. County operated medical centers, the same. Reduce the number of law enforcement needed. Less public housing. The list goes on.
I’m doing much better financially by buying rather than renting, but... Right now I’d like to be able to pull up stakes and move to a healthier economic environment. It would be very difficult to do without just walking away and destroying my credit
While 5 years is a reasonable rule of thumb, there are many other considerations.
Owning makes me master of my own destiny in ways that renting can never accomplish.
I can repaint, remodel, add on, landscape, etc. Tastefully done all these things can add value to a dwelling. And, when I own, inflation is my friend. When I rent inflation is my enemy.
I have owned houses for 40 years and have never lost money on any of them. Of course, I stayed put through a few panics and mortgage crises.
None of those financial tools actually include the
unseen bills, including the ever-creeping millage rates
assessed by the municipal government, in their
insane tax and spend policies, and theirattempts to
cover the municipal employees’ ever-expanding costs.
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