To Rent or Buy: Location Can Give You the Answer

Making a decision to rent or to buy can be a big one, but one thing remains clear. Your location does play a role in the process, as do other factors. As you consider what you should be doing right now, consider both your short-term needs and your long-term goals. Take a hard look at your finances and determine what the ultimate goal for your needs is. Since this is such a personal decision, making the decision can be very difficult to say the least.

The Benefits of Renting or Buying Compared

When you take into consideration the benefits of renting, including the lower cost and the easier qualifications, it is easy to see that more people will qualify for a home this way. However, look at it from the point of view of location. Your location does matter. Here are some things to consider no matter if you plan to rent or you plan to buy.

Renting a home may be a better option if you live in an area where the price of purchasing a home is simply too high. In some areas, buying a home can simply not make sense, especially when property prices are too high to get into, but also too high to justify investing.
In some areas, the market may be falling in value. This can prove to be one of the biggest risks you can take. For example, if you buy a home right now, but the value of homes is falling, with no end in sight, you may end up owning a home that you owe more on than it is worth. That means you will need to remain in that home long term in order to benefit from it from a financial standpoint.
In some cases, it makes sense to rent, over buying, when you do not plan to be in a property very long. For example, some statistics show that many Americans will move every five to seven years. If you do move that often, you end up paying just interest on the home loan you take out, which means you are doing nothing more than renting. However, you are likely renting (through a mortgage) at a rate that is much higher than you would pay if you rented in the traditional manner.

Before you rent or buy a home, know the facts. Know what the current rates are in your area and investigate the value trend occurring in the marketplace. Chances are good you will learn about a number of different factors that could affect the benefit of buying or selling.

Keep in mind that if you do decide to rent now, you do have the option of entering the buying market whenever you want. When conditions are better, buying into the market makes sense. In fact, by getting into a short-term lease, you may be able to take advantage of falling interest rates, better terms and even better value options in the home you would buy.

George Gallagher is a financial blogger who works with students and parents to find them not-for-profit private student loans.

Renting v buying: Which is the best long-term bet? (confused.com)
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William

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