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Everyone has an opinion on whether it is better to rent or buy your own home. So often, opinions are based on personal circumstances and often what is better for one person may not be the best solution for someone else. This article offers you the advantages and disadvantages of both renting and buying. Since you are the one that must decide for yourself, based on what you perceive will work the best for you, it’s best to do a little research and soul-searching.

Advantages of Renting

Price – renting can be much cheaper than buying

No commitment – Although most landlords would like you to sign a one-year lease, this can sometimes be negotiable and it may even be possible to start with a month-to-month contract.

No maintenance – If the furnace dies…call the landlord. If the plumbing backs up….call the landlord. If the electrical system is acting up…call the landlord. The only repairs you are responsible for are the ones that you or one of your guests has caused. (Plugging up the toilet is the tenant’s responsibility…not the landlord!)

No headaches – it’s easy to move on if you don’t like the place or need something bigger, and you don’t have to worry about selling, or finding a new tenant.

If the real estate market takes a big dive, you don’t need to worry. If the interest rates go sky-high, that’s no concern for you. And you can always look for someplace cheaper to live if you need to. If you own your own home, try asking the bank to reduce your payments, and see how far you can get!

Disadvantages of Renting

You have no control over your own living space. You can’t renovate or decorate as you’d like, and always have to ask permission to make changes. If you don’t get the okay from the landlord, you will either have to return your unit to its original condition, or pay to have the landlord do the work.

Most rental units have many, many regulations regarding smoking, pets, parties, noise, and so on. If you were to buy a condo, you would likely have the same regulations, but if you bought your own house, you would have more freedom to live your own life. Have as many pets as you want. Throw a party every night if you want. You get the idea. If you rent, breaking those rules can get you evicted, which can be very inconvenient.

You are helping to pay off someone else’s mortgage, when you could be paying down your own.

If you live in an apartment, you have to put up with other people’s noises and smells. If you’re used to it, no problem, but it can be unpleasant at times.

Advantages of Buying

Investing in yourself. You won’t be paying the mortgage for anyone except yourself. And if the bank is willing to lend you the money, you can be sure they think you can afford it. That’s their business…to lend you money. They won’t give money to a poor risk.

Equity increase. You can improve your asset. New paint and flooring can increase the value of your house significantly, depending on the condition it was in when you bought it. And if the bank agrees that the value of your house has gone up, you may be able to withdraw some of that equity to purchase something else that is important to you, generally through a line of credit. That money can come in very handy!

Choices. When prices drop, as they have lately in many cities in North America, it’s a great time to buy. Statistics show that real estate will always increase in value. Do you know of any houses that are worth less than they were twenty or thirty years ago? What goes down will always come up. Real estate prices always go up and down, but they almost always go up higher than the time before. You don’t have to buy when prices are high, but you can buy what you can afford if you don’t want to wait for another slow down in real estate.

Freedom. You can do whatever you want. The only people that can stop you are the police, the building inspector, and the health department! Well, maybe some others too. But you can have as many pets, parties and friends over as you like.

Pride of Ownership. This is very important to some people. There’s nothing quite like the feeling of living in something that you own! Cutting the grass or shoveling the driveway at a rental house isn’t nearly as satisfying as cutting your own grass and shoveling your very own driveway.

Stability. You can’t get a notice saying that your unit is being sold, or you will have to move out because the landlord wants to do major renovations.

Long term benefits. When your retirement days start to loom over the horizon and your house is paid off, life can be very good. If you are still making those monthly rent payments, chances are that you will have to pay them for the rest of your life. And rents seem to increase faster than pensions do!

Disadvantages of Buying

Being locked in. For some people, it doesn’t make sense to buy. If you think that your job will take you to another city every few months, it’s probably not a good idea to buy and sell your house each time you get transferred. Even if you only move once a year, it’s expensive to sell and then buy another home each time.

Maintenance. You are the one that will have to look after all those pesky little issues…toilets, sinks, leaks, mildew, electrical problems, etc. If you have to hire someone every time something goes wrong, it can get expensive.

Paying the bills. Often rental units come with some utilities that are paid for you, like water and sewage, or hydro, or gas. And it’s nice to turn up the heat on those chilly days knowing that someone else is paying for it. And if you can’t pay your bills, there are consequences.

Affordability. Not everyone is able to come up with even a 5% down payment. It takes cash to buy a house. Saving up isn’t easy, or even possible for many people. And if your credit rating is poor, chances aren’t great that the bank will be willing to lend you a whole lot.

After taking into consideration the pros and cons of each situation, it’s still a personal choice. If you aren’t ready for the responsibility of owning your own home, or if your lifestyle would be better suited to renting, then that’s the right decision for you. However, financially it is a better choice if you can buy your own home. You’ll be increasing your personal worth, rather than that of the landlord.

If you have other reasons for making the choice that you have, that’s great. But please make sure that you have made a choice, rather than letting yourself drift into the situation you find yourself in. You may find that you will want to change your situation, and if not, at least you have decided what is best for you!

Jackie Tracy of Canada Real Estate Advisor has been involved in investing and managing rental properties for over 10 years. Visit http://www.canadarealestateadvisor.ca for more information on buying, selling and investing in homes. Canada Real Estate Advisor is your source for independent real estate information.

Author: Jackie Tracy
Article Source: EzineArticles.com
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As a property investor, I’ve been renting and developing properties since 2005. Even though this is a relatively short period to establish a career, especially one in property, I have seen and learned more than I could ever have imagined.

When times were good, prices were rising and everyone wanted to buy. There were many property investors that bought property assuming that house prices would continue to rise forever and didn’t really consider the consequences if they didn’t. There where a good number of property investment companies that led you to believe this to be true, however they had ulterior motives and certainly couldn’t predict the future! The result was uneducated property investors sinking their life savings into what they felt were sure deals to make money. I know of one property investor I met, who had bought nothing but newly built flats. The problem with this was that the rental income was very low due to the huge number of flats coming onto the market at once. He managed, by refinancing, to purchase 30 flats, none of which made him any money! His strategy was to remortgage one of his flats every three months, as they went up in value, to cover the losses from the others. Guess what happened when house prices stopped rising? He lost them all!

This is a rather extreme example of how some people most definitely didn’t benefit from the ‘credit crunch’. However, as much as there are casualties there are always winners in these situations and it is good to asses both to see how we might be able to apply these lessons to our own lives.

A large number of property investors took a more calculated approach to investing in property and actually made sure from day one that they were going to have sufficient cash flow to cover all expenses. These property investors might have done their sums when interest rates were around the 5% mark. These calculated investors weren’t to know what the ‘Credit Crunch’ would do for them! Those lucky to be on tracker rate mortgages found their mortgage payments dropping month by month as the Bank of England base rate was continually lowered to 0.5%. It’s stayed there since March 2009, resulting in these lucky investors having extremely low interest payments and great monthly cash flow.

You are probably wandering how as a naive property investor I faired in all this turmoil. If I am honest, like many others, I didn’t see the ‘Credit Crunch’ coming. I also didn’t realise quite what an impact it would have on the economy and everyone around me. I am pleased to say I didn’t gamble away my life savings, but nor did I see a huge benefit from the lower interest rates. That said, if interest rates hadn’t been lowered I would have definitely gone bankrupt! I found myself in a position of survival, where I have some really dud properties, which I could do nothing with as they were in negative equity. There a few that still don’t make a profit and a few that through the lower interest rates cover these losses.

You may not be a property investor but the same lessons can be learned from the residential market. It’s all about supply and demand. The key to being able to benefit from today’s property market and any other is; being in control. This means that you are able to make the call whether to stick or twist! If you are forced into a situation, you are very unlikely to come out of it well. If you have a nice expensive house with a high mortgage, you lose your job and are forced to sell, are you going to get the best price for your property? You have left yourself in a venerable position where you don’t have the flexibility to benefit from the situation.

If on the other hand you have plenty of savings because your mortgage is affordable, you lose your job, are you as venerable? You leave yourself with a choice, a choice which could make or save you lots of money. You are not desperate to sell, so you won’t be giving your property away. You have time on your hands, so you might be able to make some improvements to the house, start a business, the choices are endless.

Only you know how to stay in control of your own personal situation. It is well worth taking the time to think of the worst case scenario, plan for it, and then live your life content knowing that you have covered your own back.

Your work may not have been affected in any way by the ‘Credit Crunch’ and you might still find you can relate to the two situations above. Whatever your circumstance you need to make sure you plan for the future with a good education and a good understanding of the choices you make.

This leads us on to today’s market and is it a good time to sell?

Is NOW a good time to SELL?

This question is one many people will be asking themselves and one which I intend to help you answer. Before I begin, I am not going to give you a definite Yes or No, so don’t get your hopes up. I don’t know your situation and at the end of the day it’s your choice. What I will do is open your eyes to the possible outcomes and help you realise the consequences of your actions.

The first thought to investigate is your reason for selling. Are you being forced to sell or are you trying to chose the best possible time to move?

Possible reasons to sell

- Up sizing
- Down sizing
- Moving to a different area
- Job relocation
- Move near to family
- Pay off debts

These are just a few of many reasons that people chose to put their property on the market. What we need to ask ourselves is how these motives affect our selling strategy?

Up Sizing

If you are looking to Up Size now is a great time to be moving.

Why?

It’s all do to with the percentage difference between the property you are selling and the one you are looking to buy. If we look at the typical flat in Forest Hill, SE London, I know that the value of a 2 bed property dropped from an average of about 250,000 in mid 2008 to about 200,000 in mid 2009. The first thought for the owner is likely to be; ‘I’ve just lost 50,000 how can we possibly sell’. In some respects they are right, why sell a property for much less than it has recently been worth? In this circumstance we need to look further as we need to know what they are looking to achieve by selling.

They want to buy a 4 bedroom house also in Forest Hill as they love the area, but have outgrown their flat. Over the same time period 4 Bedroom houses have dropped from about 700,000 to 400,000! Wow, what an amazing difference is just one year. Now that we have seen the whole picture we realise that the couple could make a 50,000 loss on their flat, but at the same time they will have just saved themselves 300,000 on the property they are looking to buy!

Do you think this couple should sell? It’s a bit of a no brainer! This is a chance of a life time to Up Size and one that won’t come around very often.

Down Sizing

For the opposite reasons given above, you may think that selling now could be too costly. You have to asses your reasons for down sizing and look at the overall picture. If you can’t afford to keep your existing property then you may be better selling, enabling to clear debts and give you piece of mind. If you are just looking to move for a change, you need to asses the finances and be conscious of how much there is to lose.

Alternatives

Many people who have been force to move against their will or wanted to sell but could justify it have looked for alternative solutions. One of the most common is to move out and put the property up for rent. Although this might not be the best long-term solution, it may well enable you to continue with your plans. If you are able to let your property and cover the overhead, this could move you from a position of being forced to sell, to one where you are back in control and able to make choices.

Conclusion

We have seen examples of some of the winners and some who haven’t favoured so well in these hard times. One thing is for sure is that we can all learn a lot from this recession. We changed into a country who want everything yesterday and live for today. This mentality was great a couple of years ago, but to stay in control, these days you need to plan for the future.

Should you sell now?

This question has to be answered by you, as you are the only one that knows the true extent of your situation. However, I hope I have shown you how you can benefit from falling house prices and given you some ideas of your own. The current market is definitely improving and there are plenty of buyers looking. If you are flexible and willing to wait for the right buyer and the right price, then why not put your property on the market and see how you get on. At the end of the day you need to be the one in control, you will then be sure to come out a winner.

Eaton Properties are a local independant Estate Agent based in Forest Hill (SE23) South East London, covering areas such as, Dulwich, Crystal Palace, Sydenham, Peckham, Brockley, Catford, Lewisham as well as many more. We pride ourselves on being a trustworthy estate agent, delivering to a standard, not to a price.

http://www.eaton-properties.com
info@eaton-properties.com

Author: Ryan Eaton
Article Source: EzineArticles.com
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Making rational decisions is not an easy task but the one thing that could help you the most would surely be information and knowledge and that is what this article can give you about real estate buying.

This is just the opening of the article about real estate buying and if you want to gain knowledge about real estate buying, do not miss reading this article.

All across the United States, there are millions of people looking to a buy home – either now or in the future. Over the last few years, lower interest rates have come along, making it more affordable than ever to buy a home. When most people stop and give it some thought – buying a home makes a lot more sense than renting a home or an apartment.

An article is incomplete without its readers and that is why it is essential that readers are satisfied with articles. We have tried hard to achieve this very purpose. And now it is for you all to judge.

When you are looking to buy a house, you’ll need to have enough money for the closing costs and a down payment. Your down payment will normally need to be around 15% of the price or the value of the property – whichever is lower. To be on the safe side, you should always try to have 20% to put down. If you aren’t able to put 20% down, you’ll need to buy some private mortgage insurance, which will cost you more in terms of your monthly payment.

Now when you are the half way mark of this article on real estate buying, we are more than sure that you would be completing this article and that is what would be the most satisfying for us.

Usually, the closing costs will be around 5% of the property price. Before you buy the home, always get an estimate beforehand. An estimate won’t be the exact price, although it will be really close. You should always plan to save up a bit more money than you need, just to be on the safe side.

If you were skeptical in reading this article thinking it would be the same run of the mill stuff about skeptical, you must now be confirmed that it is not the case here and that you should continue with the article.

You’ll know that you are ready to buy a home when you know exactly how much you can afford, and you’re willing to stick with your plan. When you buy a home and get your monthly mortgage payment, it shouldn’t be any more than 25% of your total monthly income. Although there are lenders out there who will say that you can afford to pay more, you should never let them talk you into doing so – but stick to your budget instead.

Remember that there is always more money involved with a home other than the mortgage payment. You also have to pay for utilities, homeowners insurance, property taxes, and maintenance. Owning and caring for a home requires a lot of responsibility. If you’ve never owned a home before, it can take a bit of time to get used to.

Before you fill out any applications, you should always look over your credit report and check for any errors. An error on a credit report is not uncommon so, look out for it. If you have an error on your credit report, it can cost you a lot of money in interest rates. An error will decrease your credit score, which will put you in a higher interest bracket and ultimately cost you a lot more money in the end.

If you check your credit report early enough, you may leave yourself enough time to fix any problems and get your credit back on track. Rebuilding credit can take time though, sometimes even years. You should always plan ahead – and give yourself plenty of time to fix your credit.

Buying a home requires a lot of commitment on your behalf. You should always strive to get the best possible deals, which means knowing your credit and where you stand. This way, you can get the best interest rates. You don’t want to buy a home with bad credit, simply because you’ll pay a lot more money for the home. If you take the time to fix any credit problems and save up some money – you’ll be able to get a much better home for your money.

We don’t claim that we have provided you with the best possible article on real estate buying but what we claim is that we have tried our best to provide you with a good article with pertinent content.

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Author: Sinta Makah
Article Source: EzineArticles.com
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I bought my home in 7/07 with an interest only loan, as my primary residence with the intent to refinance to a conventional as rates fell again. Unfortunately, I was immediately ordered overseas with DOD and had to rent the home out. I want to refinance and my mortgage to a conventional however, my broker is telling me it will result in an INCREASE my interest rate as its now a rental property. This seems pretty unfair to me and the Fed has exempted deployed USG employees from the 2 out of 5 year requirement. I want to refinance to a 30 year conventional but I dont know how much longer I’ll be deployed. Is there any relief for my situation ? What are my options ? .

Answer:
If I was in charge of Veterans benefits, trust me, our taxes would be sky high I would give them so much…we really appreciate what you guys do…so…don’t shoot the messenger, but this is how the military views it: The military usually will discourage the purchase of a home because of possible deployment, b/c you don’t get special benefits if you make that choice. Understand that for everyone, not just soldiers, if you are not living in the house it’s an investment property, and therefore, subject to higher interest rates. It was like that before the bust and it’s still like that. Just be glad…that you can refinance it at all…most can’t. My advice, is to sell the house, even if you break even. If I lived in your area, I would do it commission free on my end. I always do that for soldiers who can show proof of involuntary deployment overseas.

Are you considering getting into the buy to let house market? Despite the fact that the UK banking and mortgage business has been unusually volatile recently, it’s improbable that the need for homes to let will shrink is just around the corner. That being the case, there will never cease to be a potential profit in determining the best opportunity in this field. What are some of the things to look for when seeking a good buy to let opportunity in today’s uncertain economy?

Buy to Let House : Seeking the Best Land

Houses in excellent shape and well-situated are ideal when on the lookout for a buy to let house. However, this rule doesn’t always hold true. A house that needs some TLC (tender loving care) could prove worthwhile if it doesn’t cost too much. Just be sure to find an appraiser with know-how who can tell you just expense must go into patching up the place. A lot of the time these expenses wind up being higher than anticipated. They also consume more time than expected, meaning it will take longer for the money to start coming in.

Any House Can Be A Buy to Let

Nearly any home can be transformed into a buy to let house, which is something you’ll want to bear in mind. It doesn’t necessarily have to be advertised as such by the owner. You might also be able to convert a home currently being stayed in by the owner into a smart rental arrangement. In contrast, the benefit to a house that’s already set up as buy to let and lived in is that all you have to do is collect the rent from the existing tenants.In this case, you don’t have to look for new tenants or wonder if the property would appeal to any.

Buy to Let: Creative Funding

Not too long ago, it was pretty easy to acquire a mortgage with very encouraging rates for a buy to let venture, turning it into a lucrative and well-liked option.At the moment, things are not quite as simple and interest rates for such investments are likely to rise in the face of economic adversity. Nevertheless, you can still reach your goal of obtaining a house to let. You may, however, need to do some creative financing.

One alternative would be to join force with a syndicate or property club of investors. While this may, at first, seem like a complicated way to invest, it can allow investors opportunities that they would not otherwise be able to afford.

Another possibility is owner financing. Many house owners are very nervous and distressed about the possibility of repossession, causing them to consider providing financing.

Buy to Let UK : The Possibilities Are There—You Just Have to Find Them

The news from the financial sector has been alarming over the latest few months.However, no matter what happens, there is always an upside for potential investors. Even if property becomes more tough to sell due to bottomed out home values, an investor can still come out with a positive. These days, you have to be alert to rapid fluctuations in various sectors of the economy.The same holds true for getting your hands on a buy to let house. Seize the moment when it presents itself and pay close attention.

When it comes to being behind on the mortgage payment, there is nothing worse because your home is the biggest bill you have and the one that is probably the most important. So when you are not able to pay the mortgage company, you are probably not able to pay a lot of other companies. This means that your credit has taken a huge hit and you are probably getting collection calls left and right from people who want their money and they want it now. If you do not have the cash on hand to bring your account up to date, then a foreclosure refinance may be your best option.

A foreclosure refinance is where you get your loan refinanced while you are in the middle of a foreclosure process. Luckily, laws allow for homeowners to seek that option of foreclosure financing in order to help save their home. A foreclosure refinance is not going to be cheap though and there is probably going to be some up front money that will be needed to close the loan. Also keep in mind that your interest rates are not going to be all that great when doing a foreclosure refinance.

How To Get It Done

The best thing to do is to start calling around in order to see who can help you with a foreclosure refinance and what it is going to cost you out of pocket. Once that is said and done make sure that you are comparing interest rates that are being offered to you. Keep in mind that because of the hits on your credit for non-payment, you are not going to be offered the best rates out there but you still can be careful with what you sign for. A foreclosure refinance does not mean that you have to be taken advantage of.

And when you finally decide it is time to start looking for a foreclosure refinance you need to make sure what time limit you have. Depending on the state your home is in is going to determine how much time you truly have. A foreclosure refinance could take a little bit of time so you have to make sure that you have that time to spare. You certainly do not want to go through all of this just to have the house taken away at a foreclosure sale and you went through all of that time and trouble for nothing.

Go here for more about Foreclosure Prevention and Stop Foreclosure