Advantages and
Disadvantages
of Renting or Owning a
Home
Introduction:
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Background
– Throughout the United States for generations it was typical for a
couple to marry and then plan the purchase of their house. Today
the face of the buyer has changed with many single people as well
as families purchasing homes.
Problem
– Deciding when it is the best time - to buy a home, financially is
crucial.
Purpose
– Explore the benefits of buying a home rather than renting.
Scope
– Examine the advantages and disadvantages of renting and buying a
home while considering an individual’s life style, goals and
financial means.
Advantages to renting
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Level of freedom - a lease expires usually after one year
and the renter is free to move on to another location with
no penalty or loss
Very little maintenance - more free time is available to
pursue other interests
Up-front cash - dramatically less than is necessary in the
purchase of a home
Disadvantages to renting
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Throwing money away - which you
will never see any kind of return.
You are not investing it in a home’s
value
Ability to decorate and personalize
your living space is limited to
minimum
No tax advantage that the renter
can enjoy. Your landlord will
benefit from any kind of tax break
Rent increase - yearly
The Skyrocketing Cost of Renting
$5,260
$3,550
$2,400
$1,620
$740
$1,095
10 years 20 years 30 years 40 years 50 years 60 years
Advantages to owning a home
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You are making an investment - if
you do your choosing carefully,
this investment will grow
Tax benefits - you can deduct your
mortgage interest and property
taxes
You can customize your dwelling
in any way you wish
Psychological benefits - a place to
truly call home
Owning your own home has been
described as part of the American
dream for generations
Disadvantages to owning a
home
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Your home is an investment and it’s value or equity may
go up or stay the same but it may also decline. It is
somewhat risky
If you decide to move, your home must be sold and this is
a big undertaking
Maintenance - that is an ongoing process. Either you pay
for the maintenance or you do it yourself sacrificing much
of your free time.
A sizeable down payment - is usually required when
buying home
Determining the Best Time to Buy
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Did you save enough money for a down payment?
Is your job likely to transfer you to a new location in the
next few years?
Are you ready to assume the financial responsibilities
associated with property and home ownership?
Will the maintenance be too much of a burden to you?
Have you found an area in which you are comfortable?
Conclusions

We can conclude that the majority of people
would benefit more from purchasing a home
 No matter what your status, single, married,
divorced or just starting out in the workforce, it is
usually a better option financially, with a few
exceptions, to buy.
Recommendations
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Keep track of your credit report
Spend some time at the home
buyer's prep. school
Develop a budget
Get your financial picture in
focus
Find ways to save money on your
purchases
Familiarize yourself with the
various terms you will hear
relating to buying a house
Investigate mortgage prequalification and approval
Get mortgage offer comparisons
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Get a full understating of how
agency works when working
with an Agent
Find and choose an Agent
Compare housing types to
choose the best for you:
Single family, townhouse or
condominium
Check home listings and
prices online
Determine the value of a home
Compare homeowner’s
insurance
Works Cited
Bluejay, Michael. How to Buy a House: Consider the Financial Impact of Buying a House. February 2004. 17 February 2004
<http://michaelbluejay.com/>.
Dannan, Nancy. House & Home: Homeownership for Singles. 18 February 2004
<http://houseandhome.msn.com/>.
Garton-Good, Julie. The Frugal Homeowner’s Guide: To Buying, Selling, & Improving Your Home. Chicago: Real Estate Education
Company, 1999.
Glink, R. Ilyce. 100 Questions Every First-Time Home Buyer Should Ask. 2nd ed. New York: Three Rivers Press, 2000.
Lank, Edith. Home Buyer’s Kit. 4th ed. Chicago: Dearborn Financial Publishing, Inc., 1997.
Mac, Freddie. New Buyer: Rent or Buy? 2004. 18 February 2004
<http://www.newbuyer.com/>.
Murphy, Kate, and William Glasgall. “The House of Your Dreams-Pixel by Pixel.” Business Week (3594) 7 September 1998:
Personal Business
Russell, Judi. “A New Home Is Well Within the Reach of Many Buyers.” New Orleans CityBusiness 17(22) 12 February 1997:
Focus Real Estate.