Is renting better than purchasing? As home values stagnate, many people seem to think so.
But, before you decide to sign that lease, consider these points:
1. Rent usually goes up. If you have a fixed price mortgage, your payment will be the same for 30 years and – at the end of that time – you will have no house payments whatsoever.
2. A home is an investment. When you pay rent, you are putting money in someone else’s pocket.When you pay a mortgage, part of that money is being invested in your property. Eventually you can own your home free and clear.
3. A lease is short-term. If you have a one- or two-year lease, at the end of the lease a landlord can decide to no longer rent the property. If you own a home, you can live there as long as you like (if you pay the mortgage and taxes).
4. You will pay less income tax. The interest you pay on your mortgage AND your real estate taxes are tax deductible on your federal and state income tax returns. Rent is NOT tax deductible.
5. Real estate tends to increase in value. That fact is difficult to believe in a down-trending market, but in the long term real estate prices have done nothing but go up.
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