Wednesday, January 17, 2007

Rent vs Buy

Even though the market has been slow and home prices are off 10 - 20% from their market highs, it still costs less each month to rent than it does to buy a similar home. This has some buyers asking whether they should consider renting instead.

I think the majority of the "renting advantages" are seen in short-term scenarios.. less than two years.

Once you're in a home for a couple of years, you've probably broken even in most rent vs buy scenarios. And the longer you stay in the home, the more advantageous buying becomes.

Imagine renting a place because the monthly payment is lower. Well, prices tend to increase each year, making it even harder to justify buying, so you continue to rent. 30 years later, you could have had the home paid off, but instead you're paying a much higher monthly rent. That would be depressing for anyone.

I recommend taking advantage of today's "buyer's market", and finding a good home in a good neighborhood before prices start their upward climb once again.

-Chris