Home | Real Estate

You may reproduce articles from The SmartNetWorld Article Library on your website, in your opt-in newsletter/ezine or ebook free of charge as long as you abide by the simple but important rules in our Terms of Service (T.O.S)
Your use of this article signifies that you accept and agree to abide by the rules of our T.O.S.

Most Important The article must be reproduced exactly as written by the Author including resource box complete with live hyperlinks.

Property Comparison - Should a property be rented or bought?

By: William

Factors to be considered:

TIME

• Renting: Renting the house should be considered if you are a frequent traveler and you are sure that you won’t stay in the house for more than a couple of years. Due to the overhead expenditures involved, buying the house for a shorter time makes a bad financial deal.
• Buying: As opposed to renting the house, buying a house is good if you wish to reside in it for the long term. In fact, if you consider a longer time, remember that property value only appreciates with time which makes it a good option. The costs that you will have to incur can easily be spread to several years which you will be spending in the house.

SAVINGS

• Renting: If you don’t have enough savings accumulated through various sources, it’s better for you to opt for renting of the house.
• Buying: Earlier, people could buy houses on mortgage at a down payment of even less than 20%, but the mortgage companies have become very strict with these issues now. So more savings are needed for buying the house. In a way, this is beneficial to the homeowners as most of the time, due to lighter control; they assume too much risk and run into a debt trap.

CASH INFLOWS AND OUTFLOWS

• Renting: If your income is unstable, you can opt for renting the house. The rent, obviously, is dependent on many factors like the locality of the property and the terms of the landlord. Also, during the term of your stay, the rent can be increased several times. A primary reason behind renting is that if the rent is less than 2/3rd of the monthly expenses, then you can use the remaining money for other investment or work purposes.
• Buying: Mortgaging ensures that you can make the payment as long as the loan continues, or opt for a loan refinance. If you opt for buying a house, you are always certain about how much money you have to pay regularly. The overhead expenditures are: mortgage payments in a month, insurance of homeowners, property tax, and various other expenses. On an average, about a third of your income will be spent on the house expenses and taxes. However, a mortgage will not be given to you if the housing expenses cover more than 40% of your income. You may quit paying the mortgage companies, but the housing overheads will always remain as long as you are the homeowner.

TAXES

• Renting: In case you go for renting of a house, you have almost nil tax liability, as all that burden falls on the landlord. You can consult your tax advisor for more details on this matter.
• Buying: In case you are an owner by virtue of buying the house, you will have to pay the property tax as a tax liability. You, however, have an option to deduct the taxes from the interest paid on mortgage. Upon selling a house, a capital gain tax exclusion of $500,000 is made available to a married couple, and in case of an individual, it is $250,000.

Article Source: http://articles-at.smartnetworld.com

William King is the director of Dubai Estate Agents & Brokers , Karachi Real Estate & Property Directory and Designer Clothing Wholesalers & Dropshippers Directoy . He has 18 years of experience in the marketing and trading industries and has been helping retailers.

Please Rate this Article

5 out of 54 out of 53 out of 52 out of 51 out of 5 

Not yet Rated

Click the XML Icon Above to Receive Real Estate Articles Via RSS!

Additional Articles From - Home | Real Estate

• Commercial Real Estate Appraisal Sales Comparison Approach - By : Patrick C. O Connor
  
• San Antonio- Real Estate options - By : Richard46 Soto46
  
• Foreclosure Homes as Profitable Real Estate Business - By : Antony White
  
• Equestrian Property – How to Find? - By : Gareth23 Taylor23
  
• How Much Good Is Property of Seattle City? - By : connebolin94 connebolin94
  
• Dallas Real Estate - By : CatherineN
  
• Leading developers in UAE real estate industry - By : William
  
• Property Foreclosures explained for beginners - By : William
  
• Know more About Modular Homes - By : Tom10 Seybert10
  
• Foreclosures Sweep Even The Affluent Areas In Tennessee - By : Ben Needles