Shared Reading: Buying or Renting?


Do you rent or own your home? There are benefits to both but which is really better? I always thought that owning was better in the long term, but Daily Finance has recently developed an interesting list of Seven Reasons Not to Buy a Home

3) It costs a lot more than renting. Most people think you are "throwing money away" when renting. Quite the reverse. There are many hidden costs when buying a house:
  • Transaction costs (legal, real estate agent, title check, inspections, etc.) often come to 7% to 10% of the cost of a house. So you are 7% to 10% down immediately.
  • Home improvement (adding a bathroom, upgrading the kitchen, installing double-pane windows, landscaping, etc.)
  • Ongoing maintenance and repairs (periodic roofing, plumbing repairs, yard upkeep, fixing things, etc.)
  • Your real estate taxes (which will ultimately be more than the tax savings you get on your mortgage interest)

The "throwing money away" was always my belief and I have been saving for a down payment on a house, however after reading this I've thought about how many times in the past year I've called maintenance because of a leaking faucet or my washing machine stopped working. Even small things like replacing a filter on the air conditioner add up after a while.

4) It's not fun. I'd much rather have my landlord shovel the snow than me shovel the snow.

Another nice thing about my apartment is that I don't have to shovel snow or worry about landscaping. On the other side of this argument though is that some home owner associations (HOA) provide these services as part of your dues. Although the HOA adds to the cost of home ownership.

To read the rest of the article, head over to Daily Finance.


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