Buying or Renting: The Big Decision

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Author: Teve Torbes

Article source: http://www.thecomfortablelife.com/. Used with author's permission.

For many people who are renting, the big decision they have to make is whether to make the jump to buying a home. A lot of people don't do it - they're worried about pitfalls of home ownership or the hassle. But it can be well worth it to own your home in the long run.

First, owning your own home instead of renting will build you up equity in the house gradually. Instead of your payments going to the landlord, a portion goes to pay off your mortgage. That is money straight into your pocket. Second, houses tend to increase in value over time. If you're going to live there for more than two years, you really should buy your house. That is the rough amount of time it takes to pay off the initial finance fees and get enough equity to make it worth it to have bought the house. Third, you get to deduct the interest payments you make on your taxes. This is a great deal - rent is not deductable, and depending on your tax bracket you can save a lot of money this way.

There are some problems - you will have to make and pay for your own repairs, for example. It will be more difficult to move, because you'll have to wait for a sale. But the benefits largely outweigh these - the family home is the single largest asset for most people, and it just doesn't make sense to have this asset of your own.