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11 Steps Away From Buying Your Dream Home
There is no doubt that the market for houses has been on fire recently. More and more people are taking advantage of low interest rates and easy mortgage loan terms to go from being renters to being home owners. With so many people entering the...
Best Real Estate Professionals For A Winning Deal
When you give a thought to sell or buy a house or any form of property the most important question that comes to mind is how to go about it. We need some professional guidance from some real estate professional .Now the question arises is that how...
Choosing a House Plan for Your Dream Home
First things first, when choosing a house plan you must first find the land that you will be building on. Not all designs will look right or even fit on certain lots, so in order to insure that your dream home will be a good fit for your lot,...
Ohio Real Estate – Large Cities And Little Farms
Ohio is a unique state where large cities like Cleveland and Cincinnati sit next to rural farms. Ohio real estate prices mirror this diversity.
Ohio
Ohio was a mainstay in the industrial revolution in the United States. Cities such as...
The Benefits Of A Professional Realtor®
Buying and selling property is not as easy as you may think. There are many things that you have to consider when purchasing a home, or when putting a home up for sale. That is why there are real estate professionals out there armed with the skills...
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Renting Versus Buying A Home
Renters are often in a quandary as to whether it makes sense to continue renting or buy a home. Buying a home makes more sense, particularly when taking a long-term view. Yes, even in the current hot real estate market.
Renting – Advantages
Renting can have a few advantages depending on the part of the country you live in. The primary advantage is your monthly rent payment may be less than an equivalent mortgage. A secondary advantage is the fact that maintenance and improvements to the property are the responsibility of the landlord. Still, these advantages pale in comparison to the disadvantages of renting.
Renting – Disadvantages
The disadvantages of renting are significant. If you have any opportunity to purchase a home or condominium, it almost always makes sense to do so.
The biggest disadvantage of renting is the loss of value. Assume you rent a residence for $1,000 a month and you live in the residence for two years. You will have paid a total of $24,000 in rent, a pure expenditure. The $24,000 is simply gone and you will have nothing to show for it other than the time you spent in the home. Compare this to what your landlord has gained.
Rent payments are closely aligned with a landlord’s mortgage payment. Using the above example, lets assume your $1,000 rent exactly equals the mortgage payment. For two
years, you have indirectly paid the landlord’s mortgage, helping them build equity in the house by paying down the loan. In addition, the landlord has benefited from the appreciation of the property.
By appreciation, I simply mean the amount of increase in the value of the house. If the rental appreciated $20,000 in two years, the landlord has received a windfall. They may have seen a gain of $24,000 in appreciation and payments lowering the mortgage. As a renter, you have made this all possible. The landlord no doubt would like to thank you.
Now, what would have happened if you had purchased a similar home with similar financial figures? You would have seen an increase in YOUR wealth of $24,000, not the landlord’s wealth. If you renting, these figures should make your teeth grind.
If you are renting, you should be out shopping for your own property. After all, isn’t it time to make your money work for you, not a landlord?
About the Author: Raynor James is with http://www.fsboamerica.org - an online site providing national exposure for sellers listing properties and a database of properties for buyers.
Source: www.isnare.com
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