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Is it better to buy or rent a home?

Is it better to buy or rent a home?

Calvin Kramer
February 26, 201 I moved into the cheapest suburban rental I could find closest to work. Includes all utilities and is $275/month more than just the property taxes alone on the house I sold and moved out of. Renting was cheaper and I bank the interest payments that would have gone to the bank. Renting can be cheaper if you want it to be. Since renting and now owning are subsidized by government their is no telling anymore which is cheaper. Higher square footage situation is where you see a closer comparison though.

Clancy Bodmore
February 26, 201 As a special case, I think as you get into the golden years selling your home & renting makes more sense, for a lot of the reasons the article mentions. Home repairs can be a HUGE drain on a fixed income ($8k every 5 years to paint the house!! New roof $15k; new furnace $8k); the stairs that one bounded up at age 40 can seem like Mt Everest at age 70; being able to periodically relocate to geographic areas of interest can save big on vacation travel costs; RE taxes, HO insurance are also a big financial drain; gardening loses its splendor when you have to get down on your knees and can`t get up. Plus, a good part of the money realized from the sale of a primary residence is tax-free, so you can have a nice nest-egg to draw on to pay for the rent and other expenses, maybe a little travel (and if you are in your 70s the capital will probably outlast you). So - in your 20s or 30s? Then buy a home. You can rent later when there are more advantages.

1Joe Ciletti
Tyler Cheswick
February 26, 201 I owned in 2000 and sold in 2005 - I have been thinking about it but it doesn`t yet feel right. Call it a hunch - I will wait 18-24 months before making any decisions.

Harry Bush
February 26, 201 You never actually own your home -- even if you paid off that mortgage. Anyone who doubts this should skip out on paying property taxes the next time around so they can learn who REALLY owns that house.

2R PATELBob Frank
Phil Poeschl
February 26, 201 The comments here are laughable. First off, there is no right answer nationwide. Real estate is local in costs, etc. Secondly, the comments that renting is cheaper than owning are not realistic, st least long term. If renting were cheaper, no one would continue being a landlord as it would be a poor investment for the landlord. The market would correct and landlords would dump their properties. This is efficient market theory. Can their be short term anomalies? Of course but long term the landlord needs to one, cover his costs and two, make a profit from his investment. So given two exact properties, of course renting will cost more. Simple economics. And if you don`t believe me, talk to my multi-millionaire friend who retired at age 50 and all he does for income are his rental properties. I figure he profits more than 60k a year just on his rentals.

Geno Bronzi
February 26, 201 @Phil Poeschl Your comment is laughable. Why? Because you`re misinforming the public and readers. Housing costs aren`t "local". M&L costs don`t vary more than 5-7% across the country. Secondly, renting is HALF the monthly carrying costs of buying at the massively inflated asking prices of resale housing. Third, NOTHING cash-flows at current inflated asking prices of resale housing. Now "Phil"..... are you prepared to get honest with the readership here?

1Harry Bush
Phil Poeschl
February 26, 201 @Geno Bronzi @Phil Poeschl I don`t know what your issue is but if you do not understand basic economics your really do not belong here. Anyone who is a landlord becomes one based upon historical returns in the rental market. So looking back, it`s pretty obvious that owning and renting property is a pretty profitable enterprise. Now, moving forward in the future, you may very well be right and it won``t be such a great investment. With demographics and all, who knows for sure. But if that does happen, then the market will correct to reflect that reality.

Phil Poeschl
February 26, 201 @Geno Bronzi @Phil Poeschl And you comment that housing costs are similar nationwide is laughable. Depends upon the local economy. Where I am in the US, we have a very tight rental market. Central valley of CA, not so tight. Don`t lay out your ignorance cards so easily.

1Joe Ciletti
Geno Bronzi
February 26, 201 @Phil Poeschl Once again "Phil", you`ve demonstrated you`re truth challenged. M&L costs don`t differ more than 5% irrespective of location. Save your realtor talking points.

Eddie Fadel
February 26, 201 Very well written article, I wish more of those articles were published during the sub-prime mortgage Boom! To answer your question yes it is better to BUY within your Salary qualifying ratio which is 28/36% Of your Household Gross monthly income. So if you are planning to stay in your house for over 3 years and your PITI is around 30% of your gross monthly income the answer is YES BUY! Please make sure to get a home inspection done before you commit to any home. While mortgage rate are so low any renters should try to qualify provided you will be residing in your home for over 3 years. Good luck

Geno Bronzi
February 26, 201 @Eddie Fadel Don`t be silly. It`s never time to buy when housing prices are grossly inflated like they are now.

Eddie Fadel
February 26, 201 @Geno Bronzi @Eddie Fadel No one is saying you should BUY at grossly inflated prices! If you do your home there are plenty of deals currently below construction cost! If you do your homework you will find these deals across the US! I am not even suggesting cities like Detroit.

Geno Bronzi
February 26, 201 @Eddie Fadel @Geno Bronzi Construction cost at $50-55/sq ft and then reduce 33% for depreciation puts you at $36/sq ft or $72k for a avg sized house(2000sq ft)..... yet the median resale price is $180k, nationally. So yes..... prices are grossly inflated.

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