No Bull Agent

Home Buyer FAQ’s: Should I Rent or Buy?

People all around San Diego County and, frankly, the United States are looking at their respective markets and trying to decide whether they should buy or rent.  It can be a difficult decision and one that can alter the way you and your family live day-to-day for years to come.  Interest rates are historically low and home prices have dropped (search current San Diego County home prices), but is it the right time for you?  As the summer moving season approaches, let’s discuss the positives and negatives to the question, “Should I Rent or Buy?”

Positives to Owning a Home, Negatives to Renting…

In a “typical” market, home ownership allows you to gain equity over time as you pay down your mortgage and your home value increases.  We cannot ignore that for the last few years the  real estate market in San Diego and most of the country has been far from “typical.”  Depending on who you talk to and where in San Diego County…the market is nearing the bottom, at the bottom or rising from the bottom.  Frankly, there are arguments for and against each.  The point is, I believe San Diego County is entering into a phase where the market will begin on a more “typical” path.  You will not see the equity increases of four or five years ago, but instead a more sustained increase over time.  We counsel all potential and current clients that they should be willing to hold on to their home for at least five years.  If not, now is probably not the best time to buy.  The bottom line is that the opportunity for equity, over the long term, is once again a reality.

In addition to equity, currently, federal and California governments allow you to deduct a portion of mortgage interest and real estate taxes from your yearly income tax.  We recommend you discuss the potential benefits with a certified public accountant to understand how this benefit specifically relates to you as we do not offer tax advice.

Finally, your monthly mortgage payment stays constant in home ownership and monthly rent is at the discretion of your landlord and lease agreement.  That being said, your monthly mortgage payment could increase depending on the terms of your loan.  Adjustable rate mortgages would change your mortgage payment, but these terms are previously agreed upon by you.

Positives to Renting a Home, Negatives to Buying…

Home ownership is a commitment.  Some are not ready for the responsibilities that come with owning a home.  Not being ready does not mean incapable, it simply means that it may not be the right time for you.  It could be financial, family planning or employment future.  All aspects need to be considered before buying a home.  When something breaks in a home, you have to fix it.  If it breaks in your rental, call your landlord.  If after a year of owning your home, you don’t like your neighbors…too bad.  If in a rental, don’t renew your lease and move on to the next rental.

Certainly, one can make the argument, that I am bias towards home ownership.  It’s true…I am.  However, it does not benefit me to be in a position of persuading someone to buy a home.  My job is to offer information, answer questions and ensure that you are able to make an informed decision whatever that decision may be.  Contact us and we are happy to assist you whether you want to buy, rent or just have questions about the entire process all together.

Tags: home buyer, own, question, rent, san diego

This entry was posted on Friday, April 16th, 2010 at 7:20 pm and is filed under Frequently Asked Questions, Home Buyers. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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