American dream or nightmare – Should I rent or own a home?
Friday, December 20th, 2013
Issue 51, Volume 17.
Has the American dream turned into the American nightmare? Generation after generation of one-upping the previous generation may have partially been responsible for the collapse of the housing market and economy back in 2007 and has led us to where we are today.
Today, we have a generation of young Americans who are thinking twice about pursuing the same paths as their parentsÖon many levels. Many have decided that renting a home is a better option than owning one. While these dedicated renters may make compelling arguments for their preferred lifestyle, we believe it is a mistake not to pursue "The American Dream". Letís take a hard look at what the advantages and disadvantages of both renting and owning are.
Advantages of renting
• Your rent may be less than a mortgage payment
• Your landlord is responsible for the maintenance
• You only need a small deposit to rent and not a large down payment
• You donít have to worry about property taxes
• You donít have to worry about fire/flood/earthquake insurance – Renterís insurance is available and optional
• You can use your money for other investments
• You donít have to stress over the property since itís not yours
• You have the freedom to upsize, downsize or just move because you want to almost anytime you want
• You donít have to worry about declining real estate values
• Your rent may include some of the utility payments
• Your rent may include some great resort type amenities; i.e. pool, spa, gym, security, etc.
• You canít be foreclosed on and if your landlord is, you have protection under the law
Disadvantages of renting
• Rising rents may end up being more than monthly mortgage payments
• Your payments are not creating an investment for you
• Your payments are not allowing you to own anything
• Your rent payments will never end
• Your rent will increase over time
• Your landlord or management company is a constant part of your life
• You will not receive any property tax benefits as a renter
• You have to deal with the landlordís rules,regulations, and limitations
• Rental housing offers less stability and is temporary by nature
• The property owner is always in control – leaving you at their mercy
Your pet may not be welcome at the next place you rent
Advantages of home ownership
• Homeownership can build equity
• Homeownership provides status in the community
• Homeownership provides possible (sizable) tax deductions
• Homeownership lets you set the rules in your space – including welcoming your pets
• Homeownership allows you to remodel, expand, tear down
• Homeownership offers you the pride of ownership
• Homeownership can build a stable environment for children and family
• Homeownership can improve your credit score
• Homeownership allows you to borrow against your equity (be careful)
• Homeownership can end up with no mortgage – once itís paid off
• Homeownership can be a predictable payment with a fixed mortgage
• Homeownership financing is the cheapest loan youíll find
• Homeownership eliminates landlords and management companies (and all their rules and restrictions)
• Homeownership offers a hedge against inflation
• Homeownership allows you to be the landlord and rent your home to others
• Homeownership lets you use the proceeds from the sale to buy a bigger and better home
• Homeownership is the best form of a retirement nest egg
• Homeownership is the "American Dream"
Disadvantages of home
• Your home could lose value
• You could pay more than what the home is worth – avoid bidding wars
• You could stress out over finding a home/mortgage
• You may not qualify for a mortgage
• You have the added expense of property tax and homeownerís insurance
• Depending on your mortgage (ARM) the monthly payment may increase
• You need a good sized down payment
• The cost of maintaining a home can get out of hand
• You may have HOA fees that continue to go up
• You are making a long term commitment to your home
• Your exposure is magnified with increased liability and responsibility
• It is an expensive process to buy and sell real estate with the cost of the sale
• You may find yourself stressed out over ownership
• Your property taxes and insurance will generally increase over time
• Your home cold be damaged or insured by a non-covered (insured) event
• You can lose your home (foreclosure) if you stop making payments
Call me today and get the information you need to make the right decision. Do not miss this opportunity. The info is free, call now! (951) 296-8887.
Questions regarding available inventory and/or other real estate matters email
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