Tag Archives: Rent or buy?
Buy a home in a great compromise and it is important to make sure you are ready for it.
The historical data displayed in many countries as the price of homes climb for large periods, but also during the real estate crisis can get up to half the price.
It should be noted that the housing prices may rise, but also can be downloaded very quickly.
The advantages of buying are:
1. with each monthly payment the percentage of increases in housing.
I.e. accumulates net asset value, which is the difference between what is worth housing and the amount owed on the mortgage loan.
2. If the value of the properties increases, the value of the home will increase. This increases its net assets. If you move, you can sell and make a profit.
3 the interests of the mortgage and taxes on the property to file the income tax return, can be deducted resulting in considerable savings.
4. If you need a loan are you can borrow, using the liquid that has accumulated, to a lower interest rate that would be paid by other unsecured loans.
On the other hand, rent also presents a series of advantages:
1. to rent, there to make a payment in advance, normally, one or two months rent as a security deposit.
This amount will be much less than 10% or 20% of the value of a home that is normally required to have cash for the down payment.
2. If someone agrees to rent for one or two years and wish to move at the end of lease, all you need to do is notify the lessor. You don’t have to find a buyer.
3. the lessor is responsible for repairs and maintenance without additional cost to the lessee and, at times, heating and utilities accounts are included in the rent.
On the other hand, both rent and buy have disadvantages.
The rent does not accumulate net asset value and rent can increase each time renewed lease.
When buying, should take into account major accounts of insurance and taxes in addition to the costs of maintaining housing in good condition.
But when the rate of growth of housing prices is greater than the performance that you can get with other investments and higher than the borrowing costs that are paid by the mortgage, can be said should be buying the home instead of renting.
However, the most common situation that occurs is the opposite, the interests of loans and the returns on other investments do not reach the levels of growth of the price of the House, so you buy is the best option from an economic point of view.