Deciding Whether to Rent or Buy a Home

Where you live is one of the most important decisions that you'll make. Choosing the right house or apartment is generally a mix of deciding on a location, distances from work or school, and how much it's going to cost you each month. When trying to make this decision, however, another important decision must also be made… you need to decide whether to rent your new home, or to take the next step and buy it.

Each option has its own advantages and disadvantages, some of which are presented below to assist you in making your own decision.

Advantages of renting

One of the main advantages of renting a house or apartment is that the property belongs to someone else, meaning that all of the responsibility for keeping up the property and paying taxes on it also belongs to someone else. By law, landlords are required to maintain a certain standard with their property and must pay the expense of restoring the property to that standard should repairs need to be made.

Generally, it's also much easier to move into or out of a rental home than one that you own… the most binding agreement that you and a landlord have is a lease, and many do not even require that.

Disadvantages of renting

Unfortunately for renters, they are forced to adapt to their landlord's schedule in regards to when rent payments must be made, when maintenance occurs, and to a certain extent even when required repairs will be made provided it is within a timeframe set by law.

Another disadvantage of renting is that you generally continue to make rent payments of a certain amount for the entire time that you live in the rented residence, after which time you have nothing to show for the money paid.

You also must abide by some of the landlord's rules, whether you agree with them or not… failing to do so can result in eviction.

Advantages of owning

Owning your own home has a number of advantages… you set your own rules in regards to pets, decoration, and landscaping (provided that none of your decisions are prohibited by law), you don't have to plan around a landlord's schedule of maintenance, and once the mortgage is paid off you have no further payments to make toward ownership of the home.

If needed, you can also use the equity that you build up in your home (or the home itself) as collateral for loans later in life.

Disadvantages of owning

One of the main disadvantages of owning a home is that you are responsible for all taxes, fines, and repairs to your home. You also have to go through the mortgage loan process to borrow the money to buy the home, and when deciding to move you have to find a buyer for the home or at least a renter.

If you decide to rent out your home later, then you are also responsible for maintaining the home for the renter and meeting all civic codes that deal with property management.
Making your decision

The best way to make the decision as to whether to rent or own is to stop and consider your current finances and goals. Figure in exactly how long you plan on living at the residence, as well as whether or not you'd be able to get a good interest rate on a mortgage loan if you decided to buy.

Weigh your options carefully, taking the time to make the right decision for your current needs.

You may freely reprint this article provided the following author's biography (including the live URL link) remains intact:

About The Author
John Mussi is the founder of Direct Online Loans who help homeowners find the best available loans via the http://www.directonlineloans.co.uk website.

Don't Invest in Real Estate Until You Get Educated!

They're among the oldest infomercials on television: the "Nothing Down" seminars that promise riches beyond belief in an unbelievably short time. People who can barely string six words together come on and testify about how they took 39 cents and turned it into a million dollars in three weeks. (Or something just as fantastic.)

Why are those infomercials still running, in various forms, after more than thirty years? The answer is simple: people want a better life, more money, and will try anything if it sounds at least halfway plausible. It's always been that way, and it always will.

But I'd like to encourage you not to toss away your own hard-earned money on those get-rich quick real estate schemes. Instead, invest in yourself by learning as much about the real estate world as possible. It's a multi-faceted field, and there are many ways to make money, but they all have one thing in common. You have to KNOW what you're doing BEFORE you commit to any real estate deal!

If you're not committed to becoming a knowledgeable investor, you would be better suited toward putting your money into a well-managed mutual fund. There are risks there, too, of course, but they are generally must smaller than investing in real estate.

There are many reputable places to begin learning, and they don't HAVE to cost a great deal of money. Starting with the Internet, you'll find hundreds of excellent sites that can take you from the rankest beginner status to savvy investor at no cost. Most colleges have investment classes, many of them held at night or on the weekends, and a fair number of them can also be taken via the Internet. Just start searching--they're everywhere, no matter where you may live.

Don't let anyone tell you it's better to learn as you go. That can be the most expensive way to learn, and can potentially cost you everything you own. You CAN make money, good money, in real estate investing, but don't start until you've become a serious student of the field, and have gotten a great deal of expert knowledge under your belt.

Copyright © Jeanette J. Fisher
Jeanette Fisher teaches beginning real estate investors how to find, finance, fix and sell bargain properties. Free Credit for Real Estate Teleseminar Free ebook "The Truth about Making Money Flipping Houses" at http://doghousetodollhousefordollars.com

Don't Be A Penny Pinching Landlord

Most of us who are small real estate investors buying and renting single family homes are accustomed to making every dollar count. It's that habit that causes us to make a silly decisions when we advertise a house for rent.

Just take a look at the Home For Rent classified section of your newspaper. You will see rows of two or three line ads that all seem to blend together in an uninspired glob. Yes, I know newspaper ads are expensive, but have you ever stopped to think how much a bland three line ad is really costing you? Let's do some logical thinking about this penny pinching.

In our example will use a rental house where you have a monthly mortgage payment of $850. That includes principal, interest, taxes and insurance. You are offering the home for rent at $900 per month. If you divide your monthly mortgage payment by 30 you will realize that it is costing you $28.33 cents to own the home. That's $198.33 per week. So every week that the house is vacant you are losing $198.33. Cutting two weeks from that vacancy will save your $396.66.

If you are penny pinching with a little three line ad that fails to find a renter for weeks you are watching $198.33 fly out of your grasp every week. That's when you should realize that it just makes good business sense to buy a nice big classified ad, which will give you the best chance of catching the eye of a renter the first time it runs.

Filling vacancies fast is the mark of a good investor. As soon as your current tenant gives you the required 30 day notice that he or she will vacate the property you must swing into action. Your goal should be to have a new tenant ready to move in the day the old one moves out. Do this...

1. Ask your current tenant if they know of any one who is looking for a rental. Ask them to spread the word among their friends and co-workers. If you have a good relationship with the tenant they should be willing to help you find a renter. Offer them a one or two hundred dollar reward if they find a new tenant for you before they move out.

2. Immediately put a For Rent sign on the property with flyers describing the property and the cost to rent. We have a page on our Web site for each property we own with inside and outside photos. Included on the page on room dimensions, and the location of nearby features like schools, hospitals, shopping, public transportation, etc. We include the Web site address on the For Rent sign and on the flyers.

3. We send a postcard announcing there will a rental available to the neighbors. They may have friends whom they would like to have live nearby. We offer a cash reward of one or two hundred dollars if we rent to someone they referrer to us before the current tenant leaves.

4. We pass out flyers to nearby businesses like barber shops, nail salons, dry cleaners, etc. We make the same cash reward offer to them as we do to the neighbors.

Penny pinchers don't do things like that and they pay dearly for their mistake.

Mark Walters is a real estate investor who shares his experience with free videos at http://www.CashFlowInstitute.com