Palmer Property Associates, Inc.
Bringing Light to Real Estate
Housing is one of the three necessities of life. From a preservation standpoint, everyone needs some place to get out of the weather, a domicile to eat and sleep and relax in! But is it better to rent such a domicile, or would it be better to buy one?
In over 90% of the cases our recommendation is that you buy a place to live rather than just rent.In all of the comparisons we've seen where people analyze whether to buy or rent, we have found none which project their analysis beyond about 10 years, and most are analyzing for even shorter periods of time. But the fact is, you will need a place to live for the rest of your life, not just for the next year or two. And the thing which makes buying so much more advantageous than renting is the fact that in 20 or 30 years, your mortgage will finally be paid off in full, which your rent will never be!
In some situations, such a planning to be in an area for only a short time, etc., then it might be wiser to rent instead of buy. But even then it might be a great idea to buy a place for yourself, and then turn it into an income property to rent out, after you move away. (See our other Seminar Letter on "Investing in Real Estate.")
There is a sense of security which comes when a family owns their own home. Home owners generally tend to me more stable, as well as better citizens in their communities. Even the children feel they have a definite place to call "home," a place where they really belong. It is true that one cannot guarantee the economic future, which makes some hesitate to buy their own home; after all, in the Great Depression of the 1930's didn't real estate values fall terribly? But if one were only renting, they don't have any "bubble" to fear bursting; in fact, their rents might be decreased in such an economic climate!
But the all past indicators are that real estate values, though they may slow down at times, will almost assuredly continue to increase in value! (We have all heard stories of how grandma and grandpa paid only a few thousand dollars for the home they raised your parents in, then the children sold it, after the grandparents died, for many times the original cost!)
Another concern some have is, what if a person lost their job and could no longer pay the mortage payments? Probably pretty much the same as would happen if you were renting, you might lose the roof over your head. (But the chances of a Mortgage Company working with you in such a "crunch" time is, in our opinion, much greater than that of a Landlord doing so.) And there is a huge advantage in buying rather than renting a home provided by Uncle Sam and the IRS. The interest you pay on the mortgage (which is very large during the first few years of payments), as well as the property taxes, are tax deductible against your earned income. (Rent payments are not!) So this can actually save you some money that you might otherwise have to pay in income taxes.
Families especially benefit from owning their own home. You can usually have a garden and yard work for the children to help with. There are also minor repairs that it would be very beneficial for them to learn to make. These usually are not allowed by the Landlord, who prefers to have their own maintenance people do the work. And if some Landlords do allow you to do such things as, perhaps, paint the house, who really benefits from the improved value you thus give to the property by all of your labors?
Other advantages to buying rather than renting have to do with the freedom you have to paint or remodel or add-on to your home without facing a Landlord's refusal to allow such. Along this same line, some fear that should the property need, say, a new roof, that an owner might have a hard time paying for one, and would rather use the money for something else, even if they could. It seems so much easier to just let the Landlord foot the bill for such things as roofs, furnaces, water heaters, etc. But, in reality, the more your property is improved, the more the Landlord is likely to think it is worth, so you can guess what will likely happen to the rent. (But for a home owner, even though the value from such improvements will indeed increase the value of his property, a mortgage with a fixed payment cannot be increased! All that will happen is that the equity will increase because the property has been made more valuable.)
It is true that you will have, at the time you get your mortgage paid off, an older property, which may need more repairs than something "cutting edge" new, but those who rent will always be having to pay a premium price for the brand new features; and most of them can be retro-fitted into your older home, anyway. It does require some faith to buy a property rather than to just rent. But, in our opinion, the advantages far outweigh the disadvantages in over 90% of the cases!
If we can help you find a home to buy we will love to do so. We are Realtors, and members of the Wasatch Front Regional Multiple Listing System, which gives us access to almost all of the listings in the State of Utah. And we occassionally have some properties which the Owners ask us to help them sell without putting them on the MLS, which others will not know about. So please give us a call and let one of our superb Real Esate Agents help you!
THANK YOU VERY MUCH!