Rent vs Buy in Whiting>Question Details

Dorothy Scal…, Real Estate Pro in Whiting, NJ

Is it better to rent or buy in the current market?

Asked by Dorothy Scalzo, Whiting, NJ Thu Apr 2, 2009

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Gregory Bain’s answer
Dorothy, I am of the opinion that it is a "buyers market" only when it is cheaper to pay the principal, interest, taxes and insurance of home ownership than it is to rent a similar home in the area. What's the correct answer to your question?
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2 votes Thank Flag Link Thu Apr 2, 2009
In a buyer's market that we are in right now buying can sometimes be less $$ per month than renting. Make sure you can afford to buy-not just your mortgage payments but any anticipation of real estate taxes going up, money left in savings for "just in case" repairs on the home and 6 months mortgage payments savings in case of illness, accident or job loss. Also don't jump in and buy a "fixer upper" without more than adequate money. So many times homes go into foreclosure and short sales where the home owner began the repairs and ran out of money before finishing.
0 votes Thank Flag Link Fri Jul 24, 2009
There is no correct answer to your question because no one knows what the market will do from here and when. But in general buying is always a better investment than renting. As long as you can afford the monthly payments. Don't buy just to buy and then get in over your head and wind up in forclosure like so many others are today. It has to be in your budget and affordable to your specific situation. But real estate in the long run will almost always appreciate. The market will determine by how much and how long that will take - so in todays case it wont happen over night. But when it was a sellers market it was happening pretty quickly. To be safe assume it will be a long term investment but one that you can use down the road for future endevors. It may turn out to be money you can send your kids to college with, retire with, or relocate to that dream locale. You can't borrow against a rental. You can't make a profit on a rental. You can't get a return on your investment on a rental. And no one knows when this bubble will pop. So if you can do it now and find a home you love then go for it! If you wait the mortgage rates may sky rocket again making it impossible to afford the ones you like!
0 votes Thank Flag Link Thu Apr 2, 2009
This all depends on you and your situation. For example, your income, savings, price range you can afford as well as your taste. Many love the feeling of having a home that they can do whatever they want to do with it without asking a land lord. Are you wanting a home or just a place to live? First time home buyers may want to take advantage of the 8k tax credit. Many Bank owned homes are VERY reasonably priced. Maybe you want to put down roots and start a family. If you have sold a home recently and have tons of equity to move, then that may be a consideration to take into account. I for one (since I am self employed) enjoy the added tax benefits as it allows me to itemize.

There is NO yes or no answer to that question. You will need to evaluate your needs, wants and current position to determine what is best for you.
0 votes Thank Flag Link Thu Apr 2, 2009
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