Friday, November 3, 2006
For What It's Worth: Worth Home
It is the most expensive decision a person can make. When you pick up the classifieds, you know the housing market is a buyer's market. However, as 7's Craig Stevens shows us, For What It's Worth, renting for some people may be a better option.
WSVN -- Call it a sign of the times.
If you are looking for a home, South Florida is for sale.
Even with amazing ownership opportunities, renting may still be reasonable for some people.
Lesley Bellus: "I choose to rent right now mostly out of convenience, I do want to buy and I am looking to buy something soon, but, right now, it's just a matter of time."
Timing is everything for Lesley Bellus.
Her dreams of buying a home are on hold as she starts a new PR agency.
Lesley Bellus: "Down the road I know I do want to buy something, but, right now, the renting, it's easy."
It may be easy but not always economical -- at least not long-term.
According to 7 News financial expert Ken Wurtenberg renting versus buying is a decision almost all of us have to make.
Ken Wurtenberg, 7 News Financial Expert: "Ideally we all want the American Dream -- we want to invest and own our home, and we want to accrue that equity that we build up."
What you need to take into consideration is if you are relocating or are financially strapped.
One advantage is it that renting requires a smaller amount of money up front.
Ken Wurtenberg: "Renting is a situation where you have low up-front costs, you have a fixed determined amount due each month."
In addition, the owner is responsible for repairs.
Ken Wurtenberg: "The carrying costs for repair and maintenance of the homes are usually the burden of the owner of the residence and, indeed, when your lease is up you can just leave and walk out."
Now, if you think you are ready for home ownership, do your homework.
Remember, you have to keep in mind purchasing price, closing cost, mortgage rates, property taxes and insurance.
According to Ken, most owners with buyer's remorse make the same mistake.
Ken Wurtenberg: "They bought when it was too high and they didn't have enough disposable income to support the mortgage and to have all the other living expenses, you get over your head, financially."
If, on the other hand, you make a wise investment -- owning has its advantages.
First, your mortgage payments will stay the same for 30 years.
Second, as you pay down your mortgage, your equity builds.
Ken Wurtenberg: "You can also customize your house. Your house is your house and by owning it, you can remodel it, redo it, knock out walls and have a lot of fun with it. You make all of those improvements, and they're your improvements."
Moreover, there are significant tax benefits.
Ken Wurtenberg: "You get deductions for the mortgage interest and the real estate tax, so it lowers the burden on you financially. Therefore, you can itemize tax returns and you might have other deductions available, which would not be if you were a renter."
Lesley looks forward to the day she owns a home.
However, with work being such a worry, she definitely feels renting is the right choice right now.
Lesley Bellus: "I don't have to worry about anything when it comes to the home life as far as upkeep, so it's working well for me."
Home ownership can also provide security for retirement.
In fact, some homeowners are cashing in to save for college or retirement and looking to rent.
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