Rent or Sell?

It was a question that once never entered our consciousness - if we wanted to move, of course we would sell up! Now suddenly there are too many variables involved and many of us are asking the question: shall we sell now or shall we rent our house.

Well, one thing is for sure, if you want to buy in a new location, then it is best to - at least - try and sell in the old location so that you can get settled in the new one.

According to the U.S. Census Bureau, nearly five and a half thousand Americans are moving every day. Wow! Surely some of them will be moving into your area?

Apart from finding it easier to settle into the new area, another reason to list your home if you are planning to move is this: the area that you will be buying in is experiencing the same housing difficulties as you; therefore so as long as you are selling AND buying you have lost nothing.

This is because selling in a buyer's market means that you may have to settle for a lower price than you hoped for, but buying in the same buyer's market means that you too will be able to negotiate a lower price for your new home.

There are drawbacks to renting your home, although many landlords will not experience them, it is just a question of luck. Luck and careful reference checking! As a renter you are fully aware that you are buying your landlord's home for him/her; the renter has less to lose than you. Another point is that renters do not get tax breaks but home owners do.

One of the biggest single reasons for staying or being a home owner is the tax credit system. Over the years, tax relief will more than balance any loss of equity that you may feel you are taking.

The United States government actually subsidizes you to enable you to pursue the American dream and buy your own home. There are many different types of tax relief that we, as Americans, benefit from.

Both from local taxes and federal taxes there is a choice of tax credits and/or exemption due to mortgage interest payments, homestead exemption, property tax help, private mortgage insurance, capital gains exemption, and points paid on loans.

Many of us save thousands of dollars every year as we levy tax relief against our mortgages, but we forget to add these savings into the formula when we are summing up the advantages or disadvantages of buying a house.

In this 'instant gratification' age, it is almost impossible to believe there will be advantages to home owning in thirty years time when we are older. What are the advantages?

In time, the house will be paid for so there will finally be no mortgage payments and the home may render some equity money via a reverse mortgage for emergency spending money.

However, renters get no emergency spending money and they can never stop paying rent. Unless of course they get notice to leave their home, and as a homeowner, remember, this can never happen to you.

Yes, home ownership may not be the perfect answer, but it beats busking!