Is It Worth It? Five Questions To Ask Yourself
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Unless you're planning to live in your property for at least five years, it's not worth it. You can evaluate the rent-versus-buy question with customized personal data on this <a href="http://www.nytimes.com/interactive/business/buy-rent-calculator.html" style="padding-top: 0px; padding-right: 0px; padding-bottom: 0px; padding-left: 0px; margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; text-decoration: none; color: rgb(40, 139, 203); ">calculator</a>, created by the <em style="padding-top: 0px; padding-right: 0px; padding-bottom: 0px; padding-left: 0px; margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; ">New York Times</em>. Also ask yourself: Do you have the credit score to get a loan? Do you have six to 12 months worth of cash to service the debt in the event of unemployment or some other life event? Another resource to help you make a decision: A series of useful <a href="http://www.khanacademy.org/video/renting-vs--buying-a-home?playlist=Finance" style="padding-top: 0px; padding-right: 0px; padding-bottom: 0px; padding-left: 0px; margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; text-decoration: none; color: rgb(40, 139, 203); ">videos by Khan Academy</a> walks through the financials of buying versus renting.</p>
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Maintenance, property taxes and <a href="http://www.walletpop.com/2011/01/03/why-your-homeowners-insurance-bill-is-still-through-the-roof/" style="padding-top: 0px; padding-right: 0px; padding-bottom: 0px; padding-left: 0px; margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; text-decoration: none; color: rgb(40, 139, 203); ">homeowner's insurance</a> and other disaster-related insurance (earthquake and flood) are expensive annual costs. But <a href="http://realestate.aol.com/blog/2010/11/16/what-renters-insurance-does-and-doesn-t-do/">renters</a> are not exempt: They also need to factor in insurance.</p>
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Home ownership is not only a financial commitment, but has a major time cost as well. If you don't enjoy trips to Home Depot or yard work on the weekends, then owning a home might be less rewarding for you. For others, the pride and personal expression that comes with owning a home or the fun of <a href="http://realestate.aol.com/blog/2010/09/28/can-fixer-uppers-work-for-first-timers" style="padding-top: 0px; padding-right: 0px; padding-bottom: 0px; padding-left: 0px; margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; text-decoration: none; color: rgb(40, 139, 203); ">transforming a fixer upper</a> makes it worth it.</p>
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If you know your family will be expanding, would another year of renting allow you to save and buy a bigger house? Or do other life events, like a <a href="http://realestate.aol.com/blog/2011/04/08/five-real-estate-questions-for-divorcing-couples/">divorce</a> or change in job, point to moving or downsizing? No one can see perfectly into the future, but an honest appraisal of your goals may tip the scales toward renting or buying.</p>
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Stan Humphries, chief economist at <a href="http://www.zillow.com/">Zillow.com</a>, says that a benefit of buying a home is that it doesn't require the financial will power that a renting-and-investing plan does. "If the money just goes there [to a home payment], it is more achievable to save," he says. But is it really acting as a savings plan? Home-value appreciation is not a sure thing, as so many underwater homeowners today know. But if you're planning for a long-term commitment, then appreciation and growth in equity pay off.</p>
![<p> Stan Humphries, chief economist at <a href="http://www.zillow.com/">Zillow.com</a>, says that a benefit of buying a home is that it doesn't require the financial will power that a renting-and-investing plan does. "If the money just goes there [to a home payment], it is more achievable to save," he says. But is it really acting as a savings plan? Home-value appreciation is not a sure thing, as so many underwater homeowners today know. But if you're planning for a long-term commitment, then appreciation and growth in equity pay off.</p>](http://www.blogcdn.com/www.dailyfinance.com/media/2011/06/piggy-bank-razor512.jpg){kind=link}