Over the past few years there has been a lot of bad news when it comes to the housing market. With the economic crisis and the real estate tumble many home owners lost their homes to foreclosure and even many more have been under water for the last few years. For these reasons and others, many people have thought that renting is the better option for the time being. This thinking, however, may no longer be correct.
Right now, buying instead of renting may be the best option for several reasons. First, interest rates are at historic lows. This means you can purchase more home for less money that you could have in years past. Considering that rents across the nation are also on the rise, lower interest rates may mean that you can actually purchase a new home for a lower monthly payment than your current rent.
In addition, an argument can be made for that fact that paying rent is just throwing away money each month. When you are renting you are not building equity with each months payment as you are when you are purchasing your home. A monthly payment that is going towards purchasing your home helps build equity in your home. You are able to build even more equity as home prices go up. Some would argue that this is a type of forced savings – putting money in your home that can be drawn back our when you eventually sell it.
Depending on your tax situation, most people are also able to deduct the interest paid on their home on their tax return. This can result in additional savings compared to paying rent as your rent is usually not tax deductible. When factoring in this tax savings to a monthly payment many people end up saving even more money when they are purchasing a home compared to paying monthly rent.
When you are purchasing your home you are also no longer at the mercy of your landlord when it comes to waiting for repairs or if they decide to end your lease and rent the home to someone else or sell it out from under you. You also do not need to get approval form anyone to make additions or modifications to your home when you are purchasing it instead of renting.
Another big advantage to buying vs. renting is that you can often end up with a much more energy efficient home. Many rental properties are older and less energy efficient than newer construction. Town houses such as www.madisonsquaretownhouses.com for example, are brand new construction that are much more energy efficient than many older rental homes resulting in additional monthly savings in utility costs.
If you are currently renting, now may be a very good time to start thinking about purchasing that new home you have been dreaming about. With potential monthly savings, the opportunity to build equity and being able to make additions and modifications to a place you can call your own has always been the American dream.