There are many reasons that can be argued in favor of either renting or buying a home. The bottom line is that it largely depends on the time and place where the decision is made and the resources that are available. Research shows that the costs of renting and owning remain proportional steady. This is called the price to rent percentage which is the average cost of purchasing a home divided by what the person would pay for a yearly rental.
Calculations by researchers demonstrate that home prices are currently equal to paying rent for over 17 years on average. The price to rental percentage changes on a yearly basis. Currently it is at historical levels. For example, the cities of San Antonio, Charlotte, Seattle, and Honolulu are more renter friendly locations to name a few. On the other hand, there are cities that have more favorable purchase options than rentals like Phoenix, Cleveland, and Los Angeles amongst others. These cities have price to rent percentages a little bit over 14 years. However, there are many other aspects to take into account for deciding to purchase a home. Buyers might want to settle into a neighborhood with a better school for their kids for example.
Moreover, there are tools like Ginnie Mae sites, a government mortgage institution, with a buy versus rent calculator. Aspects that should be consider include the time that is expected to live at the home, mortgage closing charges, property tax amounts, and property insurance to name a few. Make calculations on the amount of return that other investments could yield versus the house purchase option since buying a home is an investment. Renters can usually afford to live in nicer areas than could be afforded otherwise and homeowners have to cover the costs of house repairs.
For anyone that wants to purchase a home, follow these steps:
- Check rental listings.
- Check homes for sales.
- Read all new real estate information.
- Match pictures for home sales versus rental with various online tools like AOL real estate.
- Check for information on the neighborhood crime statistics.
- Check for which companies provide the cable, phone, and Internet services.
However, some Americans consider that there is no price tag on the emotional and social advantages of home ownership. Having a mortgage or a rental property depends on the individual needs and desires. If owning a home is a dream, it shouldn’t be denied.
This article is provided courtesy of Bad Credit Loans Direct, a consumer finance website providing information and tools on small loans for bad credit and other personal credit services.