Army Wives Homes: To Buy or Rent Your Home Part 1
Some of the Army Wives have been struggling with the military post’s housing office in the Lifetime TV show this season. Sounds pretty ideal to have a “housing office” in the first place, huh? The reality is that military housing might not be what you want or need, and sometimes you need to live in temporary housing for months before you get your new place. And many military families are asking themselves, do we rent or to buy when moving to a new town – and so might you!
For the next two weeks, I’m forgetting the “deco” from my Army Wives Home Deco blog posts and not talking about home decorating at all. Today – let’s talk buying versus renting your home.
I am not a real estate expert, but after living in seven different states in the past 7 years, I have some personal experience that I can gather my opinions from. I have also successfully “flipped” a house and made a small fortune and also successfully lost a fortune with another house. Now? I rent!
LOCATION, LOCATION, LOCATION
Yes, you have heard it before, and it is such a cliché, but today I’m giving it a new meaning. It totally depends on the housing market in your location whether it’s smarter to buy or rent. Currently there are still housing markets where the prices are bound to decline in the upcoming years (read: do not buy!) and markets where prices are already starting to go up again (buy now before they get higher!). Do your research, and ideally start scoping the market at least six months before you are making your decision.
WHICH ONE IS CHEAPER?
Many say that renting is “wasting your money” but it is fairly relative. You need to pay to live somewhere anyway, and in a bad housing market you might loose more money when you are moving out and selling your home. A great way to do a quick analysis to decide which one gives you more for a buck, see how much a monthly mortgage would cost you and how much rent would cost in a similar type of location. When interest rates are high, there are a lot of houses on the market and the house prices are in decline, it often means that you can find a rental that you could never afford to buy. And in today’s market that is the case in several areas, including New York and L.A.
Gimme me a break; does someone really still think a tax break is a reason to buy a house? The reality is that your homeowner’s insurance, property tax and the maintenance costs of your home will way surpass the tax break you are getting. According to Suze Orman the true housing cost can be up to 45 percent more than the base mortgage! That means that if you would pay $1500/month as rent, you can compare it to a house that you would pay around $1030 monthly mortgage - not to a house with $1500/month mortgage!
More home buying/renting tips next week!