The classic question seems to always pop up when thinking about moving is it better to rent or buy? However with the market changes of the new recession the answer to the question varies more now than it has in a long time. Historically for the most part many experts have suggested that it was cheaper to rent as renters were not on the hook for things such as property taxes and maintenance costs. However, that doesn’t take into account the savings amassed by buyers through home equity. Here are some factors to think about when making the decision whether to buy or rent.
Location Location Location
Most likely the single most important determining factor in your decision is the exact location of the property. Especially in this current real estate climate, not all markets are created equal. Pay attention the price trends of the market you are considering moving to. Has it gone up in the past year? Is it projected to increase or decrease in the coming year? How are the mortgage rates and the property taxes?
Are you in this for the Long Haul?
Another big factor in whether or not you should buy or rent is how long you would like to hold onto the property in question. Generally if you plan on staying in the home for a few years, than buying is the better play because of the gains in property value that are expected, buyers willing to hang in will be rewarded. However, if you plan on moving from the property, you are better off renting as the extra costs will not be offset by gains in property value in the short term. However this also depends in part on the market being discussed as well.
For example, markets such as San Diego in the short term are expected to see slightly decreasing prices. However, as the market continues to find its bottom, these prices will trend upward in coming years. This can be a potentially great bargain for buyers looking to get in at a low price.
This is filed under Home Buying.