Renting Long Term Versus Buying a Home

The decision whether to rent long term or to buy a new house depends on a lot of factors.  This decision depends on different markets- what makes sense in New York City might not work in Las Vegas, and vice versa. Also, because homeownership shows the person’s status quo to a certain extent, it becomes more difficult to decide whether to rent or to own a house since the decision will have an emotional and social pressure.

Renting or buying a house is one of the biggest decisions you are going to make in your lifetime. Make sure to evaluate the costs, benefits, and drawbacks of renting vs. owning las vegas luxury real estate.

Advantages of Buying

1. Building equity. This is how it works: when you pay your mortgage, part of it goes to the loan’s interest while the rest pays the principal. It means any amount you pay for the loan’s principal is your equity. It represents the percentage of the house that you already own. If you’re able to reach 20% equity, that will be sufficient to apply for a home equity loan or you can also consider refinancing your mortgage, if you do this you could be eligible for lower interest rate or a longer window of time to repay the loan.

2. The government gives tax benefits to homeowners that are not available for renters. Be reminded though that not all homeowners can avail of these benefits. Several states exempt homeowners from paying a portion of property tax. If you are going to pay your federal tax, you can deduct your property taxes and what you paid for the interest of your mortgage. This can substantially reduce your taxes especially if you have a higher tax obligation.

3. Source of income. If you don’t need to stay there, you can have the house rented. The payment for the rent can serve as the money that you can use to partially or totally pay the mortgage, tax and insurance obligation.

Advantages of Renting

1. You don’t need to worry about the maintenance or repairs. If something is broken, you can just call the attention of your landlord or superintendent and they will have it fixed.

2. It is easier for you to relocate. Should you find a job elsewhere, relocating will be easier and less time consuming, and potentially cost lesser too.

3. You don’t need to worry about the status of the real estate market. The trends can swing up and down depending on various conditions. There is a possibility that the value will decline over time. This will never bother you; it’s your landlord’s problem.

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Advantages of Buying Real Estate Now

Advantages of buying real estate are shown below:

More Choices-In USA, they currently have over 3000 homes on the market. Buyers have more choices today than they have in several years. You have your choice between condos, town homes, single family homes, golf course properties, water oriented properties, gated communities. You can also choose between large lots and small lots and whether you would like lawn maintenance included or not. The choice is yours today more than ever to find a home that fits your needs and fulfils your dreams. But do remember, that well priced homes in desirable locations can still sell fast, even in a buyer’s market.

Interest Rates are Low

With interest rates under 5%, what better time to buy real estate! You can even afford more homes now than you might have a year or so ago. It usually is a good idea to purchase as much home as you can afford in this type market. Always consult with a reputable lender to become knowledgeable about the variety of financing options available and what might be best for you. In addition, ask for a prequalification letter. A good buyer’s agent will use this in the negotiating process. It will also ensure that you are not looking at homes that you cannot afford.

Negotiate & Incentives

We all remember the days of 2005 when you had to decide how much over asking price to offer the seller. Today that is a different story. A good buyer’s agent can negotiate the best price and terms to suit your budget. In a buyer’s market as we have today, sellers and builders are offering a host of incentives for buyers. For instance, closing costs or buy down of the interest rate, even flat screen TVs and cruises are among popular incentives today.

Competition & You are not rushed

In today’s market you do not have the worries that we did a couple of years ago, of other buyers bidding the prices up from the original price. You won’t be rushed into a quick decision. One of the highlights of a buyer’s market is that you can take your time finding your perfect home and do not have to feel pressured to settle for anything less than the home of your dreams.

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