Shannon, Other/Just Looking in Far Northwest, South...

Rent or Buy? I am looking for an apartment/ condo and I'm debating which is better to rent or buy?

Asked by Shannon, Far Northwest, South Bend, IN Wed Jun 18, 2008

I'm not sure how long we will be in the same location. It could 1, 2, or 3 years.

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Erik Armstro…, , 47802
Wed Jun 18, 2008
Buying real estate is a big decision. It's an investment that should not be taken lightly. If you can not say, "I will live in this home for at least the next five years...you are not ready to buy it and should look at a rental instead. This is sound advice to help protect your investment as well as your sanity. Trust me, if you buy a house and then decide to move a year later you will not likely have enough equity built up to pay commisions, or closing costs. You will not have enough equity to make a decent down payment on the home and your home value will not have enough time to appreciate to merit a higher asking price.
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Torrey Lewis, , Chicago, IL
Wed Jun 18, 2008
Shannon,

You need to take a serious look at your bigger picture, and weigh the pro's and con's of renting and buying.

If you are not planning to move in the next 5-7 years (at least), have a down payment saved up, have spoken to a lender, and can afford the mortgage, you are probably a good candidate to buy a home. The advantages to buying a home are that you can earn equity, write off a percentage of your interest paid, make improvements to the home and/or decorate as you wish, and take a solid step toward securing your financial future.

If you are not sure about if or where you will be moving in the near future, have little or no down payment saved, and if the mortgage payment you would be looking at would be a strain, you may find it more comfortable to continue to rent a home. A real estate investment is meant to be a long term investment, and if you resell a home within the first couple years, much of your equity you earn could be eaten up by commissions, transfer taxes, closing fees, and the like. True, you won't have as much freedom to customize a rental, but if you can rent a place for less than you would pay in a mortgage, and then put the extra money in a savings account, you may set yourself up well to buy when you do find that it's time to settle down.

True, this is a good market to buy in, but, as I stated, real estate is meant to be a long term investment. If you buy now, plan to hold on to the property for a while. If you are able to, this may be a good time to buy property, live in it for a few years, and then rent it out if and when you decide to move. Make sure to talk to a Realtor, attorney, financial advisor, etc. before you make any decisions.

Hope this helps! Good luck!
0 votes
Kim Van Selow, , Fishers, IN
Wed Jun 18, 2008
This is a great time and opportunity to buy real estate, if you are in the position to do so. Rental rates have continued to hold, while purchase prices of real estate have dropped some with the recent market. Also, purchasing real estate gives you certain tax advantages that are beneficial.
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