Housing Notes Value of Housing Housing is typically

Housing Notes

Value of Housing ● Housing is typically the largest expense for most spending plans ● Prices of housing vary greatly ● Things that affect the value of housing ○ Size ○ Location ○ Amenities

Common Expenses experienced when choosing to rent

Common Expenses experienced when choosing to buy

Should I Rent or Buy? Pros of Renting: 1. Low Maintenance – When you own a house, you alone are responsible for all of the maintenance and repairs. However, when you are renting, you usually don’t have to worry about things breaking down or the roof leaking. If something needs to be fixed, you just call the landlord. It’s their responsibility to keep up with their property 2. Mobility – As long as you’re not trapped in a lengthy lease, it’s easy to get up and move when you rent a property, while homeowners have to worry about selling their house before they can move. Depending on the housing market and location of the property, your house could be up for sale for a long period of time. 3. Less Out-of-Pocket Costs – Renting can save you hundreds or even thousands of dollars each year. Your mortgage will probably include things like; principal, interest, property taxes, mortgage insurance, homeowner’s hazard insurance, flood insurance, and possibly condominium or association fees.

Should I Rent or Buy? Cons of Renting: 1. Forget About Remodeling and/or Decorating –Renters usually aren’t allowed to even paint their units, much less make more extensive changes. You can probably forget about changing the carpets, putting in new ceiling fans or even changing the blinds in most cases. 2. Paying For Someone Else’s Asset – When you are renting, that means you are paying someone else’s mortgage and property taxes for them. He or she owns the property and can sell it at any time.

Should I Rent or Buy? Pros of Buying: 1. The Mortgage Interest Deduction – One of the best real estate tax deductions is the one that allows you to deduct 100% of the mortgage interest that you paid in that year. It means that every penny of interest you pay on your mortgage is tax-deductible 2. It’s an Investment and Asset – When you purchase a house; it is yours and becomes an asset. You are free to sell it or rent it, as you see fit. Once you pay off the loan, you own the property free and clear. 3. Modifications – You can do anything you want to a property that you own. You can add on rooms, whole floors, paint, redecorate, remodel the kitchen, or anything else you so desire.

Should I Rent or Buy? Cons of Buying: 1. So Much Maintenance – As the owner of a home, you will be responsible for all of the maintenance. When the plumbing breaks at three in the morning, you are the one who will have to call the plumbing company and foot the bill. You will have to pay for HVAC work, roof repairs, cracks or leaks, window repairs, and a thousand other things that all add up. Owning a home can be really expensive because of these reasons. 2. Lack of Mobility – You can’t just up and go when you are a homeowner. If you decide you want to move to another city or state, you will have to either sell your property or rent your house. 3. Housing Market Uncertainty – Eventually, you will probably want to sell your home. Depending on the housing market, the house may be worth more or less than what you paid for it.