3 Reasons Why You Should Buy and Not Rent

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There are several advantages to owning your own home. While buying instead of renting is not for everyone based on your current circumstance, there are far more benefits to homeownership over the long haul. Continue reading and discover three significant reasons why you should buy and not rent.

Cost stability and savings

One of the biggest issues people have with renting is that a tenant does not have control of whether the price goes up over time. Many renters are under the misconception that once they agree to move into a place they are locked into a set price for years to come. Once your lease ends, your property can choose to increase the price of your rent, which may be out of your budget. With homeownership, you are in more control than renting because you can calculate and set your mortgage payment. Homeowners have peace of mind that their mortgage will stay the same until it is paid in full. Also, in many cases, homeowners pay less in mortgage payments than renters do in rent. The reason for this is because rental properties are in business to make money and will need to increase their prices for their business to be profitable.

Homeownership is an investment

One of the major benefits of homeownership is that it is a financial investment. A mortgage allowers a homeowner to pay off their home over time, but it also allows them to build equity in the property, and the price of the value of the property may go up over time as well. With this, homeownership is a significantly better long term investment than renting.

Ability to customize

When you rent an apartment, house, or condo, you are typically limited in what you can do with the living space. Some property owners have restrictions on your ability to paint, put in new carpets and new appliances, or even hang items on the walls. When you are a homeowner, these restrictions do not exist. You can customize your home to your exact liking to make it your own.

HUD Foreclosures

HUD foreclosures and VA Foreclosures are some of the best homes to buy when price is part of the equation. As with most Americans, price is always a concern. If not buying the same house for less, why not buy more house for the same dollar invested? When looking for a good deal it is hard to do better than the VA or HUD foreclosures market. The simple truth is that there are just more VA and HUD homes on the market, as they represent such a large number of mortgages that are generated each year. This translates into more foreclosures just by the magnitude of difference between all others comparing to the two largest.

The two largest also being government owned and operated means that they have less time to wait to make money back on the home. The FHA is especially known for selling HUD homes for less than the average sales price in a given area. FHA foreclosures represent a fraction of HUD but they are still a significant number of homes and both should be considered.

VA (Veterans Administration) and HUD (Housing and Urban Development) have different and unique opportunities for the buyer. Both are often forgiven for the local taxes normally associated with the purchase of a home (this is on a county by county basis). Be sure to ask the local title company or escrow company to look into it for you before closing as this is often missed due to their are not used to dealing with the 2 to 3 percent of the market that VA and HUD foreclosures represent.

Foreclosure Listings Increasing

As the market settled after the mortgage meltdown foreclosure listings also settled and fewer homes were on the market with a placard reading “Bank Foreclosure” in big red lettering. This was a good thing for the entire real estate market. Having an abundance of foreclosures brings the entire market down and it makes it harder for home owners, who would like to move, to get the appropriate price for their home as a similar home down the same street was sold for substantially less and the appraiser is using the foreclosure as a comparable sale.

This is just one of the problems when there are too many foreclosure listings in any area. Another issue is the television set that sits in everyone’s living room harping about the price of homes based on the number of foreclosures and this constant barrage of negative information makes most people sit on the sidelines waiting for the market to either implode completely or to correct itself. Meanwhile while they wait, others are buying foreclosure listings and making great investments.

Whatever the reason, a market can only handle so many foreclosure listings at any given time. The more foreclosures, the lower the market gets and this is a lesson the banks that were foreclosing and selling off realized too late. The market and their investments would have been better off if there had not been a rush to divest themselves of the toxic assets made more toxic by their own actions.