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Should You Rent or Own a Home?

I understand the attraction of buying a home. It provides security, stability, and for many, the largest asset that the family owns. Most families must take out a home loan, but the interest can be deducted from state and federal income taxes. So, even without the current stimulus plan, homeowners can take advantage of government help to pay off a loan. But beyond these advantages, is home ownership always a good idea?

Advantages of Renting a Home

It may seem like paying rent is like throwing money down the drain, but is that really true? Well, put it this way. Even when you own your home, you will end up paying rent too.What I mean by that is you will have to pay money for things that do not directly build the asset value.

For instance, you must make repairs, buy homeowners insurance, and contribute to homeowners insurance dues. Those things were included in your rent before. Sometimes it can cost a lot more to own a home than it did to rent it.

Also consider how long you will stay in your home. If you may have to move, you will never build up enough equity to make your own home a real asset. In that case, it is much simpler to simply have a lease.

Is Owning or Renting a Home Better?

The decision between owning or renting a home is not clear for everybody. If your life situation is stable, you will probably enjoy owning your own home. If you are not certain about your job, relocation situation, etc., a home may not make your life more stable at all! You have certainly seen the recent spate of home foreclosures on the news lately.  Some families will be better off just renting their homes, accepting that they will always have to pay a cost to live somewhere, and removing some stress from their lives.