Excerpt from: Buying and Owning a Second Home
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| March 03, 2009 | | You may not get the whole story when deciding whether to rent or buy | One of the interesting debates that keeps cropping up -- especially in this time of housing downturn -- is whether to rent or buy. And there are even some interesting calculators out there that purport to show you which would be most beneficial. Unfortunately, rent v. buy calculators online do not always tell the whole story, reports Real Estate Pro Articles:
Many rent vs. buy calculators assume that you know things that most
financial analysts are hard put to predict: the amount that your home
will appreciate, the likely amount of taxes on your property, etc. In
order to get a somewhat accurate result, you have to know your property
tax rates, approximate closing costs and tax return deductions for the
property you are considering. If you don’t know these things, you can
have fun with the calculator, but it isn’t going to give you an
accurate idea of the true cost of buying a home.
Indeed, you need a great deal more information to decide whether to rent or buy. And you need to understand that timing can be important. For example, now is actually a pretty good time to buy. You can get good prices at low interest rates. And, the rent v. buy calculators online can't tell you that someone who owns a home has more net wealth than someone who rents.
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