Real Estate: Is It Better To Own A Home Or Rent A Place To Save Money?

 

When it comes to real estate which is better to save money – owning or renting?

real estate decision - buy or rent?

As we grow up and on our own one of the most important things we should consider doing is making a real estate purchase. Even with the market being being slow and hard, it is still a wise decision.
Real Estate is a good way to establish a good credit rating and when you take take into consideration that you are young enough, and just starting out in your careers, buying a home would allow you at this stage of your lives to utilize the property as a bargaining chip for future endeavors.

For many people who own property,it is used as collateral for an additional purchase to increase one’s own portfolio. Although some people feel, that buying a piece of real estate ties them down because of the heavy obligation,( one reason for that feeling is because they are uncertain of their goals in life), the fact is when a smart plan is put into effect, all the safe guards are there, so the concern is less to come up.

There is a lot to consider though.

If owning a home, would be more of a viable option, than renting. The initial down payment is usually between 10-20 percent if it is a purchase. Now if you decide to rent a property, rather then making a purchase, could also work to your advantage for a few reasons. The first option is if you end up renting, most of the time all you would need to put down , would be is first,last and security of the amount equaling on the monthly rent. Doing this, would not hold you down, as if it was a purchase. There are less restraints to consider. The second option is going into a contract with a seller of a property, to do a “rent to own contract”. In this scenario  you would only have to put down the minimal payment which is used as a security deposit. When doing this kind of “buying” you are able to see if the location is a good one to want to own. A good long term plan, would be to put money away for, let’s say, two years. By doing a rent to own contract, and having up to two years to make a decision, it actually would allow you, sufficient amount of time, to make the right decision on a purchase. Also consider other restraints if you own the property. There are taxes that have to be paid each year, for the right to own a piece of real estate and the additional cost of maintaining the property.

When you rent and not own, you don’t have the additional costs like paying taxes, or the up keep of maintaining the property, that you usually have to do, once a year. Again, this is additional expense owning, would depend on the monies you may or may not have. There are a lot of decisions, that have to be taken into consideration before making a final decision. If you have to only use about 25% of your yearly income for housing, then I would make a decision to buy.

If you have 50% of your income,then my recommendation is to rent and not own! It all comes down to two things to take into consideration – the amount of income you make yearly, or the amount or additional expenditures that you would have to lay out, if you own a property.

Before considering real estate, do your due diligence and consider all your options In the end it is all a matter of preference on how you want to position yourself as an owner or being a renter.

What considerations would you consider before renting or buying a home?

 

 

 

 

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Meet David Cohen

David Cohen has written 5 posts in this blog.

The point of me writing is due to not being able to continue my career at American Express. I always had a hobby to write as at times wrote as a way to keeping my mind going and to not let my disability get the best of me. I also like to write to show Empathy from getting details to reflect a passion from my heart. I grew up with a grandmother that instilled as part of my character to listen to everyone, then think in your mind, what can I do to make their life simpler. My inspiration was learned by me with a close friend that I have had since being 9 years old. His name is Harvey and we have the same birthday, but he is a year younger then me. We did everything in life from playing little league together, to working in a deli in New York for 5 years. We have a friendship that by far is a memory that will go down with the ages, as we have been friends going on 49 years.

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