You have just been through one of the most trying and difficult times of your life. Making a huge decision regarding real estate should not be made in haste. Instead, take the time to create a well thought out plan that will provide you with the best possible solution for your finances and your future.
First things first; take the time to ask yourself a few questions like: do you intend to stay in the area, is this a good place for your career, do you have a support system in place and lastly can you afford to buy?
Let’s discuss some of the Financial Pros and Cons
Tax Benefit – mortgage interest and property taxes are deductible.
Equity – the potential to build on the overall net worth on your home can provide you with investment savings.
Fixed Mortgage – provides a consistent monthly payment for the life of the loan vs. annual rental increases.
Cost – financing, property taxes, insurance, upkeep on the house and selling costs are usually higher than renting and these costs may cut into any gained equity.
Value – there are no guarantees that your home will increase value.
Limited Flexibility – should you wish to move or need the equity in the home – the processes involved become more complicated.
Freedom – you have the flexibility to move if necessary and your capital isn’t tied up in your home equity and may be invested more diversely.
Cash Flow – renting usually cost less. There are no taxes, homeowners insurance, maintenance and repair cost. This may result in cash flow that may be invested at a higher return than your real estate investment.
Rent Increases – you have no control over increases in rent.
Loss of Equity – you have no ability to gain capital in rising property values.
Annoyances – no control over management rules and there is only so much you can do about unruly neighbors.
Letting go of the past isn’t always easy but you can choose to move forward with a brand new vision for your future. Whether you decide to buy or rent, be sure which is in YOUR best financial interest. Empower yourself with knowledge, do your research, search your soul and ask for advice from professionals and remember – “Home is where the heart is”.
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