...Why Renting in Today’s Economy is better than Buying a House Matt Harrell COM/156 November 7, 2010 Karen Campbell Why Renting in Today’s Economy is better than Buying a House Foreclosure crisis is at an all time high across most large metropolitan areas in the United States. Seattle- Tacoma- Bellevue metro area registered the sharpest annual increase, 71% or one in every 129 households received a foreclosure notice. California, Nevada, Florida, and Arizona remain the hotspots for foreclosure across the nation according to RealtyTrack Incorporated Rick Sharga a senior vice president at RealtyTrack quoted “The epidemic is spreading from the states at the ground zero of the foreclosure problems out into areas that had not been previously affected.” One of the latest signs that the foreclosure crisis is worsening across the nation is, high unemployment, slow job growth, and homeowners are uncertain about falling home prices. Concerning housing, he or she has options. He or she has an option to rent and an option to buy. Renting an apartment is a better option than buying a house both renting and buying has many advantages and disadvantages. By explaining these advantages and disadvantages, I will persuade him or her into renting over buying. While renting he or she can save money, instead of spending money. “A survey conducted by Harris Interactive for the National Apartment Association in May 2010 found that 76% of those surveyed now believe that renting is a better...
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...An apartment is a self contained housing unit that occupies a part of the building (Bevan 2008. p.53). An apartment is valued by its structure. Apartments may possibly be possessed or rented by tenants. In some countries like the US apartment dwellers own the apartment and share the ownership of their public space. Hancock (2008) indicates that the largest acquirement people will always make in their life is buying of a home. It is to this date considered as the ‘American dream’ up to this date. The income tax code too provides advantages to home ownership. The considerations for renting an apartment are the same to those of buying a house. Majority of people consider owning a house to be worthwhile the model, age and design of the house notwithstanding. The option to either buy a house or to rent an apartment depends on personal preferences. Unlike when buying a vehicle, buying a car takes a long process (p.129). (Bevan 2008. p.53) explains that home owner take added care to their homes than renters, they remain in their homes longer than those who have rented homes. He reports that research shows home owners to report a high self-esteem than renters. Other than psychological comfort owning a home can be an option of tapping into house equity when emergencies arise. All the advantages of ownership can be lost once the owner gets difficulty meeting mortgage payments. Bevan (2008) further indicates that sometimes it may last for an over a decade to own a home. He indicates...
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...Home Ownership Versus Renting an Apartment COM/156 9-26-2010 Axia College of University of Phoenix Home Ownership versus Renting an Apartment The American dream for most people today, is to own his or her own home; even with the market having a downturn because of the heavy use of variable-rate mortgage loans. With house ownership the responsibilities are greater because the owner is responsible for all repairs and maintenance. This means that it is important to have savings established to be able to cover such situations as they arise. The ability to own a home for younger families that are just starting out is not always possible. So renting an apartment is a way to get settled, and to work toward setting aside the needed financial resources to purchase a house. For people who are working for a short time in an area renting is a better option, because they do not have to worry about maintenance costs as well as the steps of selling a house, the closing costs, and paperwork involved. This leads to the simple fact that in the market today owning a house is better than renting an apartment. There are several benefits to owning a house that have long-term advantages over renting an apartment. When a house is still under a mortgage the interest that is accrued is tax deductible with annual income taxes, this helps to put aside much needed income to provide for any unexpected maintenance costs. A responsible home owner should already have an escrow account in place...
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...Renting an Apartment versus Buying a Home Composition II / 156 March.20, 2011 Outline for my Essay Why should we buy a home vs. rent an apartment? There are a lot of factors to consider for both. There are a lot of steps to finding out what you would want if you buy a home and if you rent an apartment. The factors can be overwhelming and yet very important. So the first thing you need to do is get all of the information that you are looking for and put it down on paper. Then you need to weigh the pros and cons of them. Just to make sure you understand what it is you have gain and give up for each type of dwelling and how you want to own it. You also want to look at the financial part of it as well. Make sure you can afford what you are looking for or look for what you can afford. In the end you will be able to logically decide on what to do with your dilemma. So there are many factors however there are also the benefits and what you want to be responsible for and not be responsible for. So the choice is up to you and only you can make it happen. I am just giving you the information to make an educated decision. I rented for years before my husband and I decided to buy a home. It came years after and when our daughters were elementary age. I enjoy being a homeowner however I also enjoyed renting cause of not having to worry about doing all the stuff the apartment complex had to do because I paid rent. This is just a scratch on the surface of the renting...
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...home, would it be apartment sweet apartment? Owning a house or renting an apartment is significant to many individuals who like the concept of coming to their living quarters and knowing this is theirs. There are many advantages and disadvantages to owning either a house or renting an apartment, but where they live relies on the personal needs. There is much to consider between the two because the area that one wishes to live depends on how flexible their life styles are. The main decision is left to you and the main idea is what is the best choice for you. Preferably I believe in the concept of owning ones house rather than renting from someone else because the property is mine and owning a home adds more stability in my life. Both the house and apartment are stable living quarters, but its how concrete one wants to stay with their property which lies the question. When owning one's house, he or she is in full control of the home and does not have to worry about anymore payments to the house. That stability allows he or she to control the inputs on what to put into the house but its all an option; a way of controlling all factors of ones house. "As a home owner, you have complete control over when you move versus moving when you may not want to, You will always have peace of mind living in your own home" (Should I…, 2007). Basically controlling all perspectives that an owner could have with their home. On the other hand, renting is a very flexible...
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...bedroom house in a good area for same price of renting a 2 bedroom apartment. Also working for the government I knew the tax advantages I would get so I don’t have to tell you which decision I went with. III. Today I am going to show you that buying a house is a better choice then renting even in this unstable economy. IV. There are many programs that help people purchase a home. First time homebuyers even with bad credit can qualify. Do you know where to look? I will provide you with some internet sights that can be of assistance. V. There are many reasons why home buying is better than renting; the few that I will talk about are 1. Long term buying costs less on a yearly basis then renting. 2. Good financial investment and low interest rates and 3. Tax advantages Now that we are coming to a close on the semester some of you are going to be faced with the decision upon graduation as to whether you should buy or rent. I. If you have already decided that you will be staying in a certain area for at least 7 years it is shown that buying is cheaper than renting. a. On April 21st. 2010 the NY Times reported that if you remain in your home for 7 or more years you will save approximately $759/year over renting. b. Did you know you could also use the rent ratio to help determine what areas are better to buy in? To determine rent ratio you look at the average purchase price of a house and divide that by rent of a similar house. If the...
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...The amount of money saved considerably outweighs the money spent on renting a house or apartment. Not only does one save money , but the money is equally invested. Money saved by owning a home grows in many ways. Additional benefits not relating to money, such as a feeling of worth or inclusion in community decisions are positive reasons for owning a home. Spending money on rent when one can afford to buy is not the best financial decision. Though renting property relinquishes the renter of most responsibilities the benefits are few. When a person saves money to buy a house, that person takes pride in the amount of hard work accomplished to attain the goal of purchasing the house. Owning property “instantly” makes the owner a part of the neighborhood and community, along with its social advantages” (Hudson Valley Business Journal, 2/25/2008 Supplement, Vol. 19, p4-4, p. 1). One may choose to make valuable decisions when becoming part of a new neighborhood that help mold the area into a safer community. Such decisions effect the development of the neighborhood and potential businesses and events. Community associations organize neighborhood watch, family dances, sleigh rides or family dinners helping to unite the community, make it safer, and more enjoyable for families. Making decisions that advance the community toward a safer, friendlier environment is an advantage to owning property. The social advantages of...
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...A New House - Decision XECO/212 May 15, 2011 Don MacLean Axia College of University of Phoenix Much thought should be given and taken into account on whether to purchase a home. The decision to buy a home is a very big and important step that should be entered into very carefully. A new home purchase is one of the most significant decisions people will make in their lifetime. There are many factors that can affect one’s overall decision to buy a home. When people consider making the jump from renting to owning, sometimes they mistakenly consider only the cost of the rent versus the cost of the mortgage payment. Unfortunately, some people make the decision to buy a home without considering these factors. In order to determine how much housing I can afford, I must factor in many things such as location suitable for raising a child, savings, other debts, personal preference, and income. Therefore, I have decided to purchase a home and will apply some of the ten principles of economics to ensure I’m making the right decisions along the way. Utilizing some of the ten principles of economics such as people face trade-offs, the cost of something is what you give up to get it, and people respond to incentives will help shape my decision so the home buying experience can be a thought out process altogether. Other essential factors that must be included are the marginal benefits and marginal costs associated with buying a home. Purchasing...
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...Buying or Renting: Which is better for you? Your Name Com/156 Current Date Your Instructor Buying or Renting: Which is better for you? Introduction Many times we are faced with the challenge of choosing between buying a home and renting one. There are various advantages and disadvantages related to each of these options that an individual has. It is the dream of each individual to own a home in a good environment which is secure and peaceful. There are two options that one can choose from when considering a home. One can either rent or buy. It is important to carry out a thorough investigation on each of the options and make an informed decision. The decision of buying or renting any asset is crucial and should be critically analyzed. Therefore, it is important for one to take into account the benefits and costs involved in each option before deciding on the one to take. One might choose to use a buy vs rent comparison tool such as the mortgage calculator that can be provided by a lender or real estate broker. The Rent versus Buy Comparator allows the user to compare their estimated financial position after 7 years of renting with their estimated financial position after 7 years of home loan repayments (Realtor.com, n.d.). This tool will allow the buyer or renter to compare the possible financial cost and assists in making the decision whether to buy or rent. Moreover, most finance calculators will take into consideration the rent, rent insurance, expect...
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...Running head: RENTING V BUYING DECISION Renting a House v Buying a Home Decision By Odessa Millan CMB 513 – Advanced Managerial Finance Presented to the faculty of Cardinal Stritch University In partial fulfillment of the requirements for the degree of Masters of Science of Business Administration September 27, 2011 Table of Contents Executive Summary.……………………………………………………………………….….. 3 U.S. Housing Market Trends.…………………………………………………………………. 3 Waukesha Housing Market Trends... …………………………………………………………. 4 Factors in Buying a Home…. …………………………………………………………………. 4 Factors in Renting a House..………………………………………………………..………….. 6 Recommendations ……………………………………………………………………….…….. 7 Conclusions …………………………………………………………………………………….. 8 Bibliography ……………………………………………………………………………...…… 10 Appendix A – Home for Sale.……………………………………………………………….…. 11 Appendix B – House for Rent.…………………………………………………………………. 14 Chart 1 - Existing 1-Family Home Sales: United States ………………………………………. 15 Chart 2 - Share of Distressed Properties in Sales of Existing Homes …………………………. 15 Chart 3 - Number of Sales ……………………..………………………………………………. 16 Chart 4 - Median Sales Price.…………..………………………………………………………. 16 Chart 5 - Average Price per Sqft ………………………………………………………………. 16 Chart 6 – Number of Listings… ………………………………………….……………………. 17 Executive Summary This technical paper analyzes scenarios of renting a house and purchasing a home in Waukesha, Wisconsin. The format of this technical paper includes an overview...
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...employees. Chris, one of these full-time personal trainers, is well liked by his clients and he consistently has a full schedule. Between clients and even before this gym opens, Chris tries to make sure the gym is clean. He washes down equipment, cleans bathrooms, and ensures the general appearance of magazine baskets looks good. As a full-time trainer; however, Chris has his hands full and after months of pitching in and working to keep the gym clean, he’s frustrated. He discovers his boss, John, no longer cleans because he assumes Chris will. Chris feels taken advantage of and wants John to recognize his role as a trainer first. He also wants John to consider the extra work cleaning involves. He is arguing for a raise or at least, special compensation for the cleaning should he continue it. For now, though, he is “on strike” from cleaning. He presents his findings to John who is not yet ready to compromise. Argument 2 Buying a Car Mark and Sally are a young, married couple considering the purchase of a new car. Mark feels his 10-year-old, four-door sedan is still working fine and there is no need to spend more money. Sally, who is 5 months pregnant, believes that the couple should invest in something newer and safer for their future children. Sally argues that the new car will be an investment for the future. Mark agrees to look but wants Sally to agree to lease a car first. Sally wants to invest in the future and argues that the long-term cost of a new vehicle will be less...
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...New House Decision Your name Class Date Instructor New House Decision A significant amount of time for consideration and evaluations is a must when making a major purchase such as buying a new home. It is vital to properly review all economic and financial standings regardless of whether they are national or individual when thinking about purchasing a new home. The economy plays a major role in deciding whether or not to purchase a new home. A key role is played by the economy when it comes to purchasing a new home. The key principles of economics prove to be rather helpful to a new home buyer when acknowledging and comprehending the many aspects of the new purchase. Nicolas Gregory Mankiw, a Ukrainian-American macroeconomist who proved to be a rather influential source of American finances, originated the ten principles of economics. His principles are based on decision making as the essence of economy. By following the measure, these principles can increase the profitability while managing individual needs. When making a large financial decision, the basic principles of economics along with my relative needs must closely assess. Comparing marginal costs with marginal benefits while weighing out the disadvantages and advantages of the purchase is included in this process. While the search for a new home continues, a couple of key principles will be used by me when considering my purchase. "Tradeoffs" is the first principle; in economics, a tradeoff means the willingness...
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...1. Will you buy a house and lot today or pay in installment of simply rent? Use time value of money. Should I Buy a Home or Just Keep Renting? Kristin Wong Should I Buy a Home or Just Keep Renting? Dear Two Cents, I’m out of debt, and I’m now saving for a down payment on a home. It’s always been my dream to be a homeowner. But lately, I read a lot of arguments against it in favor of renting. How do I know if it’s a good idea for me? Should I buy or keep renting? Sincerely, Hopeful Homeowner Dear HH, For a long time, conventional wisdom seemed to be that you grow up and buy a home because that’s just what you do. But lately, people are realizing that it isn’t always the smartest financial move. Obviously, the housing crisis has a lot to do with that—it’s made people question the standard assumption that homeownership equals financial stability. Five Things I Wish I Had Known Before I Bought a House Homeownership isn’t a good or bad idea on its own. It has everything to do with your own situation. Sometimes, buying a home is the smart thing to do; other times, it really isn’t. Whether or not it’s smart for you will depend on a few different factors. Here’s what you should keep in mind. Don’t Think of a Home as Your Main Investment Should I Buy a Home or Just Keep Renting? The biggest argument for owning a home is that it’s an “investment.” But a lot of people overestimate the return on this investment. People tend to believe that homes are appreciating assets,...
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...review will attempt to review the book “Cash Cows, Pigs and Jackpots” written by David Trahair. The aim of this review will be to give a detailed outlined of each chapter, a personal review as well as a conclusion. This book outlines many ways to save money as well as how to be efficient in terms of spending and saving. The author attempts to prove that every person should try to save in order to retire comfortably while advocating the principal of a “cash cow”. Meaning an asset that continues to produce income over its entire lifespan. Examples of a cash cow can be summed up to a dairy cow, meaning that even after the dairy cow is purchased and paid for, it continues to provide income for the owner in the form of milk. The book also attempts to reflect on different investments products such as Tax Free Savings Accounts and RRSP’s and the difference (Pro’s and Con’s) associated with each of these. This book also outlines the difference between home ownership, renting and condos. Each of these residential properties has significant Pro’s and Con’s that should be considered by all citizens that are actively looking to purchase a new residential property. Chapter 1 _________________________________________________________________________________________________ Chapter one describes the relationship as well as the differences between the term “Cash cow”, “Cash pigs” and “Jackpots”. The Author identifies each term by giving examples and scenarios. During the duration...
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...Final Project Week 9 A New House – Decision By Barbara Rosol Due, Sunday, April 14, 2013 XECO/212 - Terry R. Blankenship, MBA, CBB Wanting to be a home owner is a very scary, unknowing and risky venture unless you have the right tools and the proper knowledge to make it a smooth transition and one you will be committed to for many years to come. This happened to me when I was young and thought it was time to move out of a small space I was renting. The choices that best describe my decision to purchase a new home would be based on the following principles. I could not imagine starting over again but I do know that by following the 10 principles of economics and analyze the markets for home purchases, you will see how easy it is to measure the benefits versus the costs. For me just starting a family and having little money to start, the best we could do is look for a home within our means. We rented a small 2 bedroom apartment with no garage and it was miles from schools and local grocery stores. We needed to raise our children in something nicer and with lots of yard space for the children to safely play. But how do we do it? We here the interest rates for mortgages are great now but the market price where I want to live must be in my budget and in a decent neighborhood, free of crime and must be close to grocery stores. I would need to seek the help from a bank that can finance and pre approve a loan for me so a realtor can start showing me my options...
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