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Patrick Curfew Adam T Walden, Instructor English 1010-28 April 3, 2013 Buying a Home vs. Renting Lerner, Michelle. "Renting vs. Buying a House How to Make a Decision, Pros & Cons." Money Crashers. N.p., 2 Nov. 2012. Web. 26 Mar. 2013 Michelle Lerners article is one to help the decision to buy or rent a home. She explains that many people have leapt into home ownership due to extremely low interest rates verses rising apartment rates. This has helped some to jump into home ownership faster than they originally planned, while at the same time there are others who have chosen to wait until the market recovers despite the incentives to buy. Michele Lerner has listed a few considerations that must be made while deciding to buy or even rent, but explains that the biggest factor of all is your own financial situation. She also listed important questions to consider which are, how long do you expect to live there? What are the costs of buying? What are your future plans? Do you have the ability to finance a home purchase? Michele Lerner then explains that buying a home is a major decision and commitment that should not be taken lightly, but when faced with rising renting rates and mortgages at a record low, purchasing has become more affordable. Michele Lerner gives wonderful advice to those who are looking to buy or even rent. Michele has provided four key questions and financial information that at some point everyone may be faced with. The personal answers to these questions I feel are the beginning of the decision process of weather to buy or rent a home and decide of the two, which is the better decision. Like Michele stated buying a home is not an easy task but with commitment and planning it defiantly can be more affordable in the end.

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Friedberg, Marlyn. "From the Desk of Marlyn Friedberg: Home Ownership versus Renting." The Record. Northjersey.com, 21 Mar. 2013. Web. 26 Mar. 2013. Marlyn Friedberg is a broker/owner of Friedberg Properties & Associates. She has had more than thirty five years of experience in real estate and holds many industry designations. Marlyn has listed several advantages to buying and opposed renting. Advantages to buying you can build equity. Which is the amount of the house you truly own. Its the difference between your loan balance and your homes market value. If you sold your house and paid off the bank, the value of your equity is what you would walk away with. Other advantages to homeowners include tax breaks, such as deducting the mortgage interest payments and property tax. Other advantages would include using the home as an investment such as renting if needed or the freedom to decorate, remodel or replace an old appliance and develop the property without requesting permission to express your personality and taste in your home. With buying a home you are more likely to settle in and become more involved in the community or with neighbors and friends. With homeownership you also have the control over maintenance on the home and yard; some may say this is a disadvantage and expensive but Marlyn explains that personal maintenance assures that all problems will be addressed properly and correctly on your home helping you to upkeep the propertys value. In Marlyn Friedbergs Article titled Home Ownership Verse Renting. She has listed several of the advantages to buying a home over renting. Two of which I find to be very important. The first would be maintenance on the home, many look to personal maintenance as a disadvantage being reliable for the unknown unexpected problems that may arise. Yet Marlyn has approached this slight disadvantage to some with the assurance that all problems that will be

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faced personally can be addressed properly and correctly. The other I find to be important, and so true, is buying provides one to be more involved in a community, friends and neighbors. Boehm, Peter. "Advantages and Disadvantages of Renting." - Yahoo!7. N.p., 10 Aug. 2009. Web. 06 Apr. 2013. In the second part of a two-part column peter Boehm examines the advantages of renting your home. Peter has had more than 30 years experience in banking and financial services in Australia. In his own words he states that it is usually cheaper to rent than buy. Renting involves much lower initial costs (you normally have to pay a security deposit of around four weeks rent) and the monthly rent is usually lower than having to pay a mortgage; you have more flexibility. You can enter into short term (e.g. six months) or longer term leases whereas when you buy, you're locked in for the next 25 years - unless you sell or rent out your property. You have considerably more mobility as a renter; your financial risk is lower. You run the risk of losing your security deposit or having to pay higher rental costs whereas your potential loss through ownership is considerably higher; Your monthly outgoings are fixed for the period of the lease whereas your loan repayments could go up if interest rates go up; With less of your disposable income being taken up in housing costs, you can invest or spend any savings as you see fit. This could include investing in assets other than property; Normal repairs and maintenance costs are your landlord's responsibility - you are only liable for rent and utility costs like gas, electricity and telephone. Your landlord is also responsible for rates and taxes. Here Peter Boehm has listed several advantages to renting such as more flexibility, short term lease and mobility if needed. Those are some advantages that I can see as a benefit. Yet as a renter you are still subject to the landlords permission and discretion of maintenance witch may not be at a cost for you but may cause conflicts or contention between the two. For example a

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landlord whom takes his sweet time while youre out of a bathroom or kitchen sink for maintenance. Kolko, Jed. "Buying a Home Is 45% Cheaper Than Renting." The Huffington Post. TheHuffingtonPost.com, 14 Sept. 2012. Web. 26 Mar. 2013. Jed Kolko states that the most important housing decision that most consumers face is weather to rent or buy a home. Helping these consumers he also has shown us the key market factors affecting the cost of homeownership. Which show the asking prices of a home starting to rebound and have even risen by 2.3%, however renting rate have risen more at 4.7%. Based on these asking prices and lowering interest rates at 3.50% buying a home is now 45% than renting in the largest metros in the United States. That is a saving of $771 a month if you plan to stay in a home for 7 years. 7 years being the average length of time Americans will live in a home before moving again. Jed Kolko then states costs aside, the decision to rent or buy a home are very personal. Theres a strong emotional component: some people want the security of homeownership and others want the footloose freedom of renting. But the financial factors are also very personal because the decision to rent or buy depends on 1. Can you qualify for a mortgage at the best rate available? 2. Which tax bracket are you in, and do you itemize your deductions? 3. How long will you stay in your home? If buying is so cheap why isnt everyone doing it? In response to this vary question Jed Kolko explains, The big obstacle holding renters back who want to buy is the down payment. Even in places where buying may be 56% cheaper to buy than to rent it still takes years to save up for a down payment and some even eight years to save up enough money for a down payment. Other reasons for people not buying in todays economy are result to the recession, high unemployment rates and some not qualifying for a mortgage loans.

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Here Jed Kolko has shared the statistics and shown us that buying a home is now cheaper than renting one in fact it is now 45% cheaper to buy. In response to this question, if buying is so cheap why isnt everyone doing it? Jed uncovered the reasons why most people are not committing to buying a home. Those reasons are the down payment, high unemployment rates and others not qualifying for a mortgage loan. To my knowledge there are many answers to all of these concerns but looking at down payment concerns, there are many options to buyers. Such as first time home buyers programs with little as 3% down nothing, which Jed failed to mention. Orman, Suze. "Should You Rent or Buy a House - Suze Orman - Oprah.com." Oprah.com. The Oprah Magazine, May 2011. Web. 06 Apr. 2013. Suze Orman States in her article titled Should You Rent or Buy a House, Just because you can buy a home doesn't mean you should, she also lists four instances in which renting makes more sense than that of buying a home as listed below. 1. You have credit card debt or you have yet to save 10 to 20 percent for a down payment. If you have credit card debt and haven't saved for a sizable down payment, you are not yet ready to own. 2. You envision moving within five to seven years. 3. Your calculations show that the cost of renting is a better deal than the cost of buying. 4. You don't really want the responsibilities and risks associated with being a homeowner. There's absolutely no rule that says you must own. Whatever feels right to you is the right moveas long as you can afford it. Suze Orman has listed four instances in which renting makes more sense for one whom is looking to buy or rent a home. These instances she lists are credit card debt, insufficient/sizable down payment, renting is cheaper and one who does not want the responsibilities of owning a home. Suze however contradicts herself with her closing words Whatever feels right to you is the right moveas long as you can afford it. In my opinion her closing remarks tone down the

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importance of being prepared to buy a home or even rent one. But according to Suze, whatever feels right is right. Rosenberg, Eva. "Is It Better to Buy or Rent a Home?" Market Watch. The Wall Street Journal, 22 Feb. 2013. Web. 26 Mar. 2013. Despite the fact that mortgage rates are near record lows, only 65.4% of Americans own homes. Homeownership in the United States is now at its lowest level since 2004 when 69% of Americans owned homes. With homeownership being at a record low some have wondered if it is even worth the American dream to own a home. Looking at the numbers the U.S Census Bureau says that the median housing costs for 2012 was around 185,200 with 10% down and others deductions your Mortgage would be around 166,700. Your monthly payment, including principal and interest, would be under $750. Keep in mind your yearly interest expense would be around $5,000 a year and say your property tax were sround1% you would be paying 1,850 per year in property tax. That is a combined amount of 6,850. Both of which can be itemized on your tax return. Looking at the average yearly saving with taxes you may only save a little but in the end the financial benefits outweigh that of renting. The biggest consideration when deciding to rent or own is how much of an increase will you face in your monthly cost, with the average cost of a Mortgage listed above being a close match up to the prices in Phoenix Arizona. According to the department of housing and urban development, the average cost to rent a home with 3 bedrooms in phoenix would be $1,363.that is a saving of nearly $700 dollars to buy verses renting in the Phoenix Arizona area. In this article Eva Rosenberg has done what I like to call crunching the numbers. Her intent is to help the decision of buying or renting a home by looking at the numbers and or costs that are included. My plan with Evas article is to show the numbers and facts of renting and

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buying in a specific area. To show that buying is cheaper and that is can be beneficial to buying a home verse renting one. Roth, Jd. "Is It Better to Rent or to Buy?" Business Money Is It Better to Rent or to Buy Comments. Time, 3 Dec. 2012. Web. 26 Mar. 2013. Jd Roth states that owning a home for some is a great and makes sense to others, but he states that the reasons are mainly non-financial. Such as Owning a home gives stability and you are not at mercy of a landlord. The other reason he listed is freedom, meaning you can do what you want to your place but even that isnt always the best bet. In Jd Roths article, Is It Better to Rent or Buy he has listed a way to determine the best option to make the best financial decision. This is the price to rent ratio (or P/R ratio) this number gives you a rough idea whether homes in your area are fairly priced figuring a P/R ratio isnt tough. All you do is: Find two similar houses, one for sale and one for rent. Divide the sale price of the one place by the annual rent for the other. The resulting number is the P/R ratio. Say, for example, you find a $200,000 house for sale in a nice neighborhood. You find a similar house on the next block renting for $1,000 per month (which works out to $12,000 per year). Dividing $200,000 by $12,000, you get a P/R ratio of 16.7.The other way to gauge the cost of housing is to compare it to your familys income. In Jd Roths article titled is it better to rent or buy? he states that owning or buying a home is great for some folks but for non-financial reasons such as stability and freedom. However he doesnt list any of the important financial decisions when it comes to buying. I see this as a weak attempt to say renting is better. However Jd Roth has introduced the P/R ratio, which I feel can help me show that buying is a better decision in the long run.