3 Reasons On Why To Rent And Not Buy A Home

Continue to Rent?

3 Reasons On Why To Rent And Not Buy A Home

Want jump back into the Redwood City real estate market?  Well look at these rents, up 14.4% in 2012.  That may do it for you. Then again it may not and that is ok too. Here are 3 Reasons On Why To Rent And Not Buy A Home

With the housing market bust, owning a home may seem like something only a moron would do. You may be right too. There is only one solid argument for buying a home in today’s Redwood City real estate market. That is…”you get to live in your piggy bank.” Or so says Professor Richard Green at USC

Professor Green said that you parents may have been correct when they kept saying to you when you were growing up that renting was “throwing money out the window”. It wasn’t because renting is such a bad thing after all if you take the your down payment funds, the money your save each month over a mortgage payment against your rent, and put it in the stock market it will outperform your house as an investment…that historically speaking and if the home is not a home in a niche market. In the end you wouldn’t have a house but you will have cash.

Professor Green does leave out on fact. That would be rents are on the rise and in San Francisco they are up 14.4% this year, which is the highest in the country. In fact San Francisco rents are going up double to the rest of the USA.

Here are reasons you may want to continue to rent your current home:

Save Money— If you add the monthly PITI, Principal-Interest-Taxes-Insurance, your monthly maintenance costs and various other taxes/fees/hookup costs etc even after tax deduction you probably with cost more than rents you may pay. This is one of the force behind the sudden surge in rents. Landlords are being hit with increased costs like parcel taxes, increased water costs, sewer fee that have doubled and garbage fees that have doubled in the last few years. Rents have been flat since the late 1980’s and now they are going up and will stay there unless there is a break down in the financial markets in the world.

Flexibility—Do you really want to live in the same place for the next 20 or 30 years? What if you had a great job with Microsoft? You could move to Washington very easy as a renter where as a homeowner it may a bit more difficult. What if you meet that special soul mate that you cannot live without but s/he lives half way across the country? A renter can move quickly with their soul mate and live happily ever after if they are in another town.

No Responsibilities— Who is going to fix the leaking roof? The water heater stop working or the furnace only gives you cool heat when it is 40 degrees outside. Who is going to pay for these big-ticket items fail?  The Landlord will to pay for expensive repairs like a new roof. If you aren’t willing to pay for these items then it will be better for you to continue to rent.

Here are reasons you may want to buy a home.

Forced Saving—As Professor Richard Green say before “live in your piggy bank”. The requirements of amortized paying of the mortgage,  is a form of  forced savings because at the end of 30 years you have constructed a very powerful saving tool. The cost at this point will be lower than any rent you would have to pay.

Timing Is Right—With homes being affordable and financing at a historical low this is the right time to buy if you qualify for a mortgage. If inflation picks up the real costs of your mortgage will go down while rents will continue to increase. This is not a bad call on your part!

Sense of Accomplishment and Pride— Depending on how long your mortgage is you will have the peace of mind knowing at the end of your mortgage you will be living “rent free”. You will have the good will and sense of being part of your community. The roots will be grown so you will be able to sit on the porch and look out knowing the dirt below you and the roof above you belongs to you. Most important are the memories…those great memories such as the births, birthday, holidays, family gathering, and the petter patter of tiny feet on the floors over the years. Life would be good. 3 Reasons On Why To Rent And Not Buy A Home

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