Should I Rent or Buy?

This is a common questions that faces those who are seeking to relocate. Unfortunately, there is no simple answer, but here are some things to consider when deciding when to rent or buy:

• Length of Stay – This is the primary factor to consider when making the decision to rent or buy.  Real estate markets (especially right now especially) don’t tend to appreciate fast enough to justify the costs involved in buying and selling a home if you don’t intend to stay for awhile.  In normal markets the rule of thumb is a three-year minimum stay.
• Taxes – Don’t forget the taxes.  For the time being the IRS still allows interest paid on the mortgage for your primary residence to be deducted from your income.  This is a large tax savings for many families, so don’t forget to consider it when deciding to rent or buy.
• Rental Rates – There is a relationship that exists in each market between rental rates and an equivalent mortgage payment for the same home.  In many areas, it is cheaper to rent a home than it is to finance the same home at current mortgage rates.  If the difference between renting and buying is large enough that it overcomes the lost tax savings, it may be a good time to rent.
• Availability of Financing – The affordability and availability of financing is a central consideration in the purchase of a home.  If interest rates or down payment requirements are too high, it may be a good time to rent.

One misconception about the decision to rent or buy is that those with less than perfect credit are doomed to rent and miss out on the advantages of home ownership.  However, with the advanced strategies available at The Property Company, you may be able to purchase now and take advantage of a favorable buyer’s market.

If you need assistance in determining the best course of action for your relocation, please CONTACT US, and we can help you make an informed and confident decision.