Buying a home is not for everyone, however; depending on your circumstances, it should be your TOP PRIORITY! Buying a home provides many advantages over renting that include tax benefits, wealth building and retirement protection among a few. Renting, on the other hand, does have some advantages. So which one is right for you?
Before you buy, make sure you consult with professionals you know and trust starting with your financial planner, accountant and your Realtor ® (this is a great article that details the many advantages of buying vs renting). This is a great calculator that will help to. Buying a home will be in most cases, the largest financial decision you will ever make. That is why you should prepare yourself on the many facets of the purchase and understand the steps to buying a home . The New York Times published this AWESOME Calculator and chart that really makes it clear the decision of Renting versus Buying.
In a recent article of the Wall Street Journal, Brent Arends writes that when determining whether to Buy or Rent, it is solely based on LOCATION and the ROI Factor or also know as The Rule Of 15:
“People want to buy when prices are up, and turn more wary when they’ve collapsed. Logically it makes no sense. Real estate website Truliahas looked at major real estate markets across the country and asked: Is it cheaper to buy, or to rent? By Trulia’s math my friend was moving in exactly the wrong direction. Rent in Manhattan: Home prices there are way too high, says Trulia. (Ditto San Francisco.)Buy in Miami. And Phoenix. And Las Vegas. And most of the other places that have been flattened by the crash. Homes there are cheap compared to rents. The cross-over point is about 15 times annual rent, the company believes. In other words, as a rough rule of thumb, homes are probably fairly valued in a city when they cost about 15 times a year’s rent. So, for example, if you’re paying $10,000 a year to rent a place, think twice about buying a home that costs more than $150,000. Dean Baker, economist at the Washington, D.C. think-tank The Center for Economic and Policy Research, came to a similar conclusion in research on the subject in recent years. Fifteen times is the historic average, he said.”
If you like, complete this form for this free book My First Home to help guide you through the process.