TO RENT OR BUY - WHICH IS RIGHT FOR YOU?

Should you sign another lease or take the plunge and buy a place of your own? Millions of Americans ask themselves that question everyday. In order to make a wise decision, consumers should consider a few factors such as their lifestyle and financial situation. There is no right or wrong answer when trying to make a decision to rent or buy. A good decision is one that is right for you. However, there are advantages and disadvantages to both.

Although most Americans own their homes, homeownership is not for everyone. If you move around frequently, have credit problems or if you cannot afford the home you want or simply do not want the responsibility of owning a home, you could be better off renting. Usually when renting the landlord or owner of the property generally pays for the cost of any work or repairs that is done to the property. And, there is generally less up-front cash needed to move in. However, when you are renting a property, you are waving good-bye to your money each month. Renting a home does not provide tax advantages to the renter. Any and all tax advantages go to the landlord or property owner. Also, monthly payments for renters can be unpredictable, depending on the lease.

Owning a home is a big responsibility. Not only does it mean paying a mortgage each month, but it also involves other costs associated with the home, such as, the cost of insurance, taxes, repairs and general maintenance. The down payment amount alone can be as much as 20 percent. You also have to consider other fees, such as lawyer's fees, points, escrow costs, appraisals, and credit checks.

In spite of the risks and responsibilities, millions of people enjoy the rewards of home ownership. Purchasing a home is generally a sound investment. As you pay down your home loan, you are building equity. And unlike many things you buy, a home can actually increase in value over time. Home ownership also offers tax advantages. The mortgage interest and real estate taxes are tax deductible, which allows you to subtract part of your housing-related expenses from your income, thereby reducing your tax liability.

There is not much doubt that for most people owning a home is better over the long term than renting. However, many first-time homebuyers are overwhelmed by the investment of time and finances associated with purchasing a house. Once you have made the decision to buy, be sure to contact a REALTOR^®. A REALTOR^® is a real estate licensee that is a member of the NATIONAL ASSOCIATION OF REALTORS^® and thereby subscribes to its strict Code of Ethics. REALTORS^® provide many valuable services to home buyers like: researching properties through the Multiple Listing Service, advising you on your financial options, negotiating the sales contract, providing you with an estimate of closing costs, as well as helping you prepare the many necessary forms for the transaction. ALWAYS trust a REALTOR^® with your most valuable financial investment. For a list of REALTOR^® Offices in your area go to www.mcarealtors.org.

Information furnished by the Montgomery County ASSOCIATION of REALTORS® and the NATIONAL ASSOCIATION OF REALTORS®. REALTORS® are the committed experts in their field.