Buying VS Renting Your Home - Which Makes the Most Sense?

The decision whether to buy or rent can be at home seems to be a difficult decision if you still get your feet wet in real estate. In reality, however, the decision is relatively simple mathematics and logic. The rule of thumb is: if you fill in the short term for those that renting makes the most sense, but if you are in it for the long haul, buying is probably the best choice.

Here's why:

Appreciate the long term real estate tends toWorth. The level of appreciation varies by region and market timing, but know in time to appreciate the most of every house of value, as long as it is desirable in an area. In good markets, the appreciation is 10% per year on an annual basis than over a long period of time. The return on investment that you can be seen effectively as a homeowner, much greater, because to use a concept called.

Use states:

Use in this case is simply to borrow money in the form of a mortgageincrease your return on investment. Suppose you buy a house for $ 200,000. To buy this house you decide to put 20% of the purchase price ($ 40,000), and take out a mortgage on the remainder ($ 180,000). For simplicity purposes, let's just assume your property appreciated 10% during the year after purchase, the $ 20,000 (10% of the purchase price of U.S. $ 200,000 would be multiplied). Expenses and interest payments on the page you just made $ 20,000 $ 40,000 on your down payment or 50% on yourMoney. Over a period of five years, your profit would equate to about $) 122,102 (one 305% return, without interest, maintenance, taxes, costs and improvement in the equation. The interest payments on your mortgage would be tax deductible, so long as your main or second home. Therefore, this would be your interest expenses which do not punish your return as much as you might think.

The truth behind the purchase in the short term:

In the short term, however, your winnings would not be soessential, as it seems because of the 5-6% real estate commission would be created, you probably sell it on the homepage. Six percent of $ 220,000 = $ 13,200. ) After your other expenses (interest, maintenance, property taxes and improvements that you would break the happiness, even if you sell after the first year.

In the long run, however, should your leveraged gains far beyond real estate agent's commission and other costs mean it makes sense in many scenarios.

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