Why Renting Makes Sense Tips

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Should My Job Situation Affect My Decision to Find Apartment Rentals or Search for Real Estate to Purchase?

When Your Job Might Affect Your Decision to Find Apartment Rentals

Your particular job situation can have a major effect on your decision to find apartment rentals that you like versus a decision to purchase real estate. This consideration – or dilemma – is not related to money; neither your salary nor savings account. That issue is a simple one to resolve. Jobs and careers affecting why you should rent or buy are much more complex. Consider the following issues that may or may not have clear answers for you.

  • At what stage is your career currently? Have you begun a real career or do you still have just a job? In the mid-term future (five to ten years) what do you foresee in your professional life?
  • Do you work for a local company or a national/international firm? Even if you love your job and your company, does the future project that you may be moving to Los Angeles, Denver, Paris, or London? If you're with a local company, with no projected geographical moves, are they financially stable? Will they exist five years from now? Might they be bought by a larger, national company?
  • Do you project a possible career change in the short term? If so, might your new career require a major move or short term salary reduction?
  • Does your job require frequent overnight travel, keeping you away from home often? Who will manage the homeowner responsibilities (lawn, cleaning, repairs, etc.) while you're away?
  • Do you work as an independent contractor or commissioned salesperson? Does your income fluctuate widely from month to month? Do you expect this trend to continue, get better, or worse?
These are but a few major factors that can influence your decision to find apartments for rent that suit you or take the step to own property. As usual, there is no right or wrong decision. The best decision is the one that fits your current and projected situation.

   
In Addition to Younger People, Who Else Can Benefit from Apartments for Rent?

People Who Can Benefit from Apartments for Rent

Rental apartments are not just for the young and unattached. When many of us are young, the attraction of having the freedom to move where we want when we want is strong. And, with good reason. However, there are other categories of people for whom apartment rentals are attractive, regardless of age.

For example, you're a computer consultant who spends the majority of every week working at client job sites in different parts of the country. Do you really want to return home on a Friday evening knowing you've got to get up early and mow your lawn in the morning?

Here's another scenario you might recognize. You love to travel. Your goal is to be away every weekend and for as much vacation and personal time as you can accumulate. Do you really want to worry about your plumbing, electrical systems, water heater, or your garden?

As a final thought, assume you've been a homeowner for 30 years, raised your family (all of whom are succeeding on their own now), and want to kick back and just enjoy life. Do you really want to still worry about when the roof will need replacing, how much your local government will increase real estate taxes this year, or if your basement will ever really stay dry for 12 months at a time? Probably not.

These are but a few real world examples of people who should view apartments for rent as a psychological and financial windfall. Renting apartments may provide you the freedom to enjoy the lifestyle you want now without having to make commitments that might detract from those things you've decided are important to you.

   
Am I Crazy Because I’d Prefer to Search for Apartment Rentals Rather than Purchase Real Estate?

Reasons to Search for Apartment Rentals Rather than Purchase Real Estate

If you prefer finding apartment rentals that suit you instead of buying real estate, you're perfectly healthy. Don't place a panic call to your psychologist. Look around you. There are probably just as many apartments for rent or other rental properties as there are homes for sale. Guess why that is the reality. Simple. Just as many people prefer to rent as to buy property. There are a number of perfectly good and solid reasons why.

  • Are you single, newly married, or living with a significant other? Buying real estate is a major commitment, typically destined to be a longer term proposition. Many people are not prepared to make that type of commitment. This is a solid answer to the question, “Why rent real estate?”
  • Does the real estate market project a downward cycle? It is normally a mistake to purchase property at the height of the market. There is little place for it to go but down. These cycles always occur, regardless of the steps the government and others take to prevent it. In a market that is about to head south, you're much smarter choosing rental apartments than paying top dollar for property.
  • Are you still debating where you want to live and put down roots? Unless you've made a thoughtful decision on both where you absolutely want to live and for how long, finding apartments for rent that fit your criteria may be the better choice.
  • Owning real estate in the short term, even in a good market, may not make you any substantial profit. If you believe there is a chance that, for work or personal related reasons, you may have to move in a year or two, you should consider rental apartments. Even if the value of your property increased 10% since you bought it, increases in real estate taxes, maintenance, and real estate selling fees may consume most or all of that increase. Instead of just packing up and moving to your next destination, you'll face marketing, showing, negotiating, and closing on the sale of your property.
This is not a complete list, but it should reassure you that you don't need to visit a psychiatrist's couch for wanting to rent. You need to spend quality time thinking about your current professional and personal situation, what you foresee in the coming years, and how you want to live your life.

   
Should I Buy or Rent If I Have Less Than Perfect Credit?

How to Make Decisions to Buy or Rent If You Have Less Than Perfect Credit

The question of whether to buy or rent real estate if you have less than perfect credit has changed and evolved over time. First, a quick history lesson. Until around 20 years ago, if you had poor credit, you were often severely challenged to enter the home buying market as opportunities to get mortgage financing were few. In the past two decades, a wide variety of new mortgage products, many targeted to buyers with less than perfect credit, emerged. Some were helpful and reasonably priced, allowing many potential home buyers to enter the market. Other mortgage programs have proven more detrimental than helpful.

The result of using some of these mortgage programs has helped push the foreclosure rate to high levels. Even those homeowners who chose one of the better “non-conforming” programs have, at times, had some problems as adjustable rate mortgages re-price upward. Regardless of how fair the terms of a non-conforming loan may be, you will pay a higher interest rate for one of these mortgages.

A better plan might be to look for apartments for rent that provide all the comforts you seek, without the potential frustration of dealing with the sometimes difficult terms of a non-conforming mortgage. After you find one of the apartments that fit your criteria, you can work on improving your credit report. The majority of credit problems can be cured in a relatively short time period -- six months to one year is common. At that time, you may qualify for a conforming mortgage loan that could save you thousands of dollars.

There is no hard and fast credit profile or FICO score you should have. But, if you make an effort to increase your credit score to around 620 or higher, you should qualify for a low interest mortgage in the future. Until that occurs, you might want to consider apartment rentals or rental homes that fit your personality and lifestyle.

   
Should I Rent Instead of Buying Real Estate in an Uncertain Market?

There Is Wisdom in Renting Instead of Buying Real Estate in an Uncertain Market

Some experts would confidently tell you why you should rent in an uncertain real estate market. As usual, there is no simple, definitive answer. The only constant is that an uncertain market is often very temporary. The real estate market will make a rather quick decision to trend up or down. Therein lies the potential problem.

An uncertain real estate market is a transitory phase between an up or down market. While the Midwestern U.S. can sometimes have longer periods of stability in real estate prices, both coasts tend to have periods of rather rapid gain or loss of value. Therefore, looking for acceptable apartments for rent during transitory periods can make good financial sense. The prices for rental apartments and homes will tend to “lag” behind a dramatic increase or decrease in real estate values.

But, never discount the primary rule of supply and demand. Simply put, as the supply of “something” increases and the demand stays the same, the price of the “something” goes down. Should the demand increase with a constant supply, the “something” price will increase. An uncertain real estate market typically indicates a confusion of which part of the equation will change, thereby causing a change in pricing and value.

Without delving into more economic theory, the decision to rent apartments and homes in an uncertain real estate market may be if not the best at least the safest decision. Making large financial decisions, after which you cannot realistically afford to be wrong, should possibly be deferred until you can feel confident about the market. Finding acceptable home and apartment rentals for at least the shorter term may prove to be a wise financial and lifestyle decision during periods of uncertainty.

   
When Does It Make Sense to Rent and Give Up the Tax Benefits I’d Get From Owning Real Estate?

When It May Make Sense to Rent and Give Up the Tax Benefits You'd Get From Owning Real Estate

The tax benefits from owning your home can be significant and very helpful at tax time. Luckily, the U.S. government has allowed most deductions for home ownership to remain active. However, as most experts would state, it is seldom a wise idea to make an investment purely for potential tax benefits. Owning real estate versus living in one of the many apartment rentals available is no exception to this policy. There are circumstances in which choosing apartments or homes for rent may make more sense.

  • Your tax bracket is a modest one. Many tax advisors have the opinion that, unless you're in a 25% or greater income tax bracket, real estate deductions are often unimportant. The standard deduction is now high enough to help those in a lower tax bracket enough to render real estate deductions an option, not a virtual necessity.
  • Your need for mobility, because of work or personal circumstances, outweighs the potential tax benefits. When life situations -- personal or professional -- indicate you need the ability to move either quickly or often, owning your home might result in your losing money greater than the level of tax benefits you'd enjoy.
  • Your mortgage is very low. Once your mortgage balance drops to certain levels, in addition to your joy, the interest deduction becomes less significant. Once that happens, the remaining primary deduction category, real estate taxes, is often insufficient to justify using tax benefits as a reason to own property. You might enjoy one of the many luxurious available apartments for rent far more than your house.
These are but a few logical answers to the question, “Why do people rent?” In these and other situations, the help that tax benefits of homeownership is outweighed by other financial or personal considerations. In recent years, some states have even instituted some allowable deductions for renters in income tax situations. These new benefits further cloud the question, rent or buy?

   
Why Do People Rent Instead of Buy, Even If Money Is No Problem?

Some Reasons People Rent Instead of Buy, Even If Money Is No Problem

People rent for as wide a variety of reasons as they decide to buy property. Certainly, money, or lack thereof, is one consideration, but it is sometimes a secondary rather than primary factor. Consider where you live right now or where you'd like to live in the future. Is your decision based primarily on your monthly income? Probably not.

There are many other factors involved in selecting a residence – a place where you'll spend 12 to 16 hours every day. Here are some reasons why you might rent apartments instead of purchasing property that are valid to many other people, too.

  • Lifestyle. Many people want to “keep it simple.” Contemporary life often seems to be a blur of going to and from something – work, shopping, recreation, socializing, school, and home. Many people have said to themselves, “No more.” Instead of dealing with mortgage payments, increased real estate taxes, ever more complex and expensive insurance issues (flood insurance, wind damage, etc.), and the real estate market, they find that writing one check per month for apartment rentals works for them.
  • Mobility. Many people find themselves in a state of potential flux in employment, personal, family, or military service situations. The mobility they seek is simply not offered by home ownership. Homes or apartments for rent often make a much better match in these situations where necessary moves may occur.
  • Reduced responsibility. If you've owned one or more homes for many years, you may be tired of all the accompanying duties. The lawn, garden, roof, plumbing, electrical, heating, painting, repairing, and general maintenance responsibilities of home ownership have become too much of a burden. Apartments for rent are often a perfect “cure” for this condition.
  • Poor real estate markets. The question of why do people rent is sometimes answered by the state of the economy. Apartments and rental homes eliminate the concern of paying too much to purchase real estate in some markets. For every case you read about that involves someone making a huge profit from buying and then selling a home, there is a case of someone buying at the height of the market and being unable to sell for a price that even recoups his/her investment.
As you can see, there are as many solid reasons as to why you should rent as to why you should buy. Your decision will be a personal one, and may change at different points of your life. Often, money or lack thereof plays only a minor role in your choice.

   
Now That I Have My First Job Since College, Should I Look to Buy or Concentrate on Finding Apartments for Rent?

With Your First Real Job , When to Look to Buy or Concentrate on Finding Apartments for Rent?

So you've completed college and have your first professional job. Now you face a classic rent or buy decision. Looking for apartments for rent that fit your criteria is typically the best decision, but you may want to consider buying, also. Ask yourself a few questions first.

  • How secure do you believe your new job to be? This question is much more difficult to answer than it was 20 or 30 year ago. Mergers and acquisitions of companies open and close opportunities, moving employees around the country, or eliminating them altogether. If you're uncomfortable about where your employment future may go – this is natural at the front end of your career – the best course of action would probably be finding apartment rentals you like.
  • Are you sure about the state, city, neighborhood you'd like to live in for the longer term? If not or you're ambivalent at the moment, you may be wise to examine apartments you like and rent one.
  • Are you already in an upper income tax bracket that indicates you could get serious benefits from the tax deductions offered by home ownership? While tax deductions are always welcomed, if you don't need them right now, it might be a mistake to make important decisions based on their availability.
  • Do you enjoy the lifestyle of many younger persons? Do you like to travel, meet new people, always going from work to social settings, etc.? If you recognize yourself in this brief profile, you may be happier sticking with rental apartments than becoming a homeowner, with all the added responsibilities. You will spend more time with an owned home than you need to with any apartments.
Remember, there is no guaranteed good or bad decision. Life is an adventure and, like a movie mystery, we don't know the ending until we watch the film. Your goal should result in a good quality of life for you – your definition of quality, not your friends', family's, or your accountant's definition.

   
As a Property Owner, Why Should I Consider Renting My Home?

When You Should Consider Renting Your Home

Your decision to rent your home should be based on a few considerations. First, understand the question, why do people rent? People rent because a) they feel they have to, or b) because they want to. The answers to these questions apply to both landlords and tenants. What is your answer? Do you feel you a) have to rent your property or b) want to rent your home? Your honest answer will dictate your potential action plan.

If you chose a), why did you choose it? Are property values declining? Are mortgage rates increasing? Is there too much inventory (properties for sale) in your area? Is mortgage money tight with few lenders willing to finance homes for anyone but perfect credit applicants?

Does choosing b) mean that you've created a financial plan that makes achieving tax deferred asset increases (value of your home) a priority? Are you facing a military or work assignment that will take you away from your home for a year or longer? Is your home a component of your retirement planning and focus? Is there an immediate family member willing to pay you market rent and for whom you'd be doing a huge favor?

The reasons that suggest why you should rent your home are varied and depend on your personal preferences, financial plans, market conditions, and, sometimes, family concerns. All of these reasons are valid and show good business sense.

   
What Conditions Might Influence Me to Rent My House Instead of Selling it?

Some Reasons to Rent Your House Instead of Selling it

Why do people rent instead of sell their homes? All business decisions contain pros and cons. There never has been a “perfect” decision. Even Bill Gates will admit that reality. Or ask Ford about the Edsel. Or, now, even ask Polaroid about instant film. Many decisions are influenced by “timing” as much as classic wisdom. An answer to the question, “Why you should rent instead of sell your home?” often falls into the timing category. Here are some reasons to consider renting instead of selling your property.

  • The real estate market is trending downward. When market prices trend down, more inventory (homes for sale) flood the market, often outstripping the demand of buyers. The law of economics 101 soon takes over. This oversupply tends to drive prices further downward so sellers can actually sell their properties. By renting your home for a reasonable price, you may attract qualified people who were looking for apartments for rent. This buys you time to wait out the down market and sell your home when prices are increasing.
  • You don't need the cash proceeds from a sale to move to your next residence. You could continue to enjoy the tax deferred increase in the value of your asset – your house – while generating monthly income to cover expenses and give you some profit.
  • You have an employment situation that will take you away for some time, but you're planning on returning to your home. Whether you're in the military, working for the State Department, CIA, or have a position that requires you to be in other states or countries for long periods of time, you should consider renting your home versus finding apartment rentals. Some people enjoy having the security of knowing their “castle” will await their return.
  • There is a shortage of mortgage money in the market. Unless you've neglected to watch TV or read a newspaper, you're aware of the huge reduction in mortgage money available in the U.S. since 2006. Like real estate market price fluctuations, this condition has also happened before and will happen again. As a potential seller, your possible market of “qualified” buyers has shrunk dramatically. This condition alone may dictate why you should rent instead of try to sell your home.
Much of your decision rests upon a) personal preference and plans, b) market conditions, and/or c) income and tax considerations. Think honestly about what you visualize for your lifestyle and financial plans. Do what is best for you. Consult with professionals (particularly about tax considerations) when appropriate.

   
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