Is it Better to Rent or Buy?

Uncertainty surrounds much of the current Real Estate market and the economy as a whole. While it is a good time to buy, being hasty at such a fragile time could prove disastrous. Potential buyers have to ask themselves very serious questions about their employment, rising interest rates, and falling home values before moving forward with a purchase. If it doesn’t feel like the right time, maybe renting is the best option. Or maybe with a little research and a lot of number crunching, a buyer can take advantage of unprecedented deals in Real Estate.

Karen Highland anwers the question, “Is it better to rent or buy in this Real Estate Market?”:

“’Is it better to rent or to buy in this real estate market?’ he question is asked regularly, no matter what the conditions of the market. It’s a question many wary people are asking after the last mortgage meltdown has affected our economy. It’s a necessary and timely question. I think we’ve learned all too well that not everyone should buy real estate. Following are some questions to help guide anyone to the answer that is right for their particular situation. Stability of location: How long will you likely be living here? If you might have to relocate within five years, you might consider renting a better option. Although we think we’re seeing the end of declining values, you want to make sure you’ll have enough value in your home to be able to sell when the time comes. Caveat: If you can get a home for a significant below market value, (as in the case of a foreclosure or short sale) you’ll insulate yourself against the problem of resale. Stability of income: If your employment is precarious, consider renting. Bad credit: Credit scores are more important than ever. If your scores are not what they need to be, you may have to rent for a while until you can bring your scores up.”

In many areas, the cost of renting is only slightly less than the cost of owning, making buying the smart decision. The difficulty for most renters is acquiring a loan or coming up with a substantial down payment. Home values, however, aren’t primed to rise for another five years, say most economists, so maybe there is no need to rush. A potential buyer’s decision, then, should be made based on the values of the desired area, not to mention the fast approaching expiration of the $8,000 tax credit.

Click through to read Karen Highland’s full post.

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