Rent or Own issue? Home appreciation % rate is really important ?

Asked by Rummus, Lowell, MA Sat Jan 1, 2011

My understanding is that Home appreciation % is single most important reason that can make owning home compare with renting. Actually if i am not mistaken, considering yearly expenses to own v rent, if home is appreciating at more than 2%, then owning is almost same or cheaper than renting. What do you guys think?
So, I am tempted to own a home in areas where home appreciation is showing upward trend. Can you name some such areas around chelmsford, westford, andover etc

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Christine Moran Realtor & Notary’s answer
Christine Mo…, Agent, Wilbraham, MA
Sun Jan 2, 2011
It is cheaper to buy than to rent. You need first last security anyway vs the down payment on a home and if the utilties are not included it is better to buy. Not if you move a lot. You need to plan to stay a few years. You can argue all angles but you are your own landlord and you can't put a price on that.
1 vote
Heidi Zizza, Agent, Framingham, MA
Mon Jan 3, 2011
In addition to my last question answered, if you rented for 3 years at 1200 monthly you would spend almost 50,000 in kiss it away cash. If you bought a house for 250K and sold it for 240K you are still ahead of your financial situation renting. Not to mention the tax write offs. Hopefully all of Massachusetts is in an upswing mode!
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Kevin Vitali, Agent, Tewksbury, MA
Tue Apr 26, 2011
Owning a home is beneficial for many people. The benefits are:

1- Tax Deductions. You should be able to write off the interest as well as property tax paid every year.
2- Appreciation of the home. It is not unreasonable to have a 2-4% appreciation over an extended period of time. Compounded on a yearly basis that can add up to serious money. A 2-4% appreciation over a 15 year period could be between $70K to $150K on a $250,000 purchase.
3- Pay down of mortgage. You are always paying something towards the principal balance of your loan. While the first 10-15 years of a mortgage you are paying mostly interest, towards the end of the loan you will be paying mostly principal.

As far as areas go, your more stable communities tend to depreciate less in down times as well as trun around quicker when the housing market strengthens. Have a buyers agent run reports on each town and see if they are in a decline have flattened or are starting to appreciate.
0 votes
Laura Feghali, Agent, Stamford, CT
Sat Jan 1, 2011
Hello Rummus,
Yes, there is also a tax benefit to owning your home vs. renting one. Why throw your money away on rent when mortgage interest rates are ultra low to purchase? Also, being a home owner allows you to decorate and renovate to your taste level without having to inquire with your landlord.
I suggest contacting a mortgage broker/banker to determine what price you could comfortably afford to purchase as that would be helpful in making your decision.
I hope this is helpful.
Good luck!

Laura Feghali
Prudential Connecticut Realty
0 votes
Ruth and Per…, Agent, Los Gatos, CA
Sat Jan 1, 2011
Hi Rummus

Clearly owning makes snese over the long haul, and clearly buying in
Chelmsford is the way to go.

It has been one of the best small towns in the country in 2207 and 2009.

Besides tax benefits and long term appreciation, owning a piece of the pie in
A great City is smart.

0 votes
Dallas Texas, Agent, Dallas, TN
Sat Jan 1, 2011
Keep in mind when you own any property you receive annual tax benefit confer with CPA for all these options. Owning a home live by your own rules not the property owner. Why make a property owner richer when you cover their entire expenses on any property.

Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
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