comprar o rentar - rent or buyThe common wisdom for decades was to buy a house as soon as you can, because it’s a great investment. That “wisdom” turned lots of people upside down in the past decade so that’s the reason that he answer isn’t so easy. Let’s take a look of some facts: 


Buying a Property: 

  1. Equity, your equity in your home is the amount of money you can sell it for minus what you still owe on it. Every month you make a mortgage payment, and every month a portion of what you pay reduces the amount you owe.  That reduction of your mortgage every month increases your equity. Also over the time the house market value can increase so your equity. 
  2. Tax Deductions,  interests paid on your mortgage loan, real estate property taxes and the interest you pay on a home equity loan  (or line of credit) on your primary residence are full deductible. Also  if you buy a home to live in as your primary residence for more than two years then you will qualify. When you sell, you can keep profits up to $250,000 if you are single, or $500,000 if you are married, and not owe any capital gains taxes.
  3. Flexibility, one of the benefits of owning a house is the ability to do with with your property whatever  you want (subject to neighborhood rules, of course). When your daughter wants her bedroom walls purple or you want a gazebo for your back yard, you can do it. 
  4. Long Term, Buying is Cheaper, in the first few years, it may be cheaper to rent. But over time, as the interest portion of your mortgage payment decreases, the interest that you pay will eventually be lower than the rent you would have been paying. But more importantly, you are not throwing away all that money on rent. You gotta live someplace, so instead of paying off your landlord’s home or building, pay off your own!

Renting a property: 

  1. Short Term, Renting is cheaper, if you don’t have 20%  down payment you will probably have to pay Private Mortgage Insurance, which is 1% of the loan amount, plus property taxes, condominium and maintenance, if you rent a property, you don’t have to pay these expenses, the landlord is responsible. 
  2. Flexibility, If you are new to your career, just arrived to town, still going or just finished college, or if you have a complicated financial circumstance, renting may be the better solution for you.  The reason is because your future may change in an instant, and it is a lot harder to move from an owned home than it is from a rental.
  3. No risk in economic recession, If  economy goes into a recession, homeowners initially suffer more than renters.  During a recession the market slows down, house prices fall, and many homeowners are stuck paying for mortgages on homes that no longer have any equity.
  4. No Debt, Many financial advisors don’t see a mortgage as bad debt, but it is debt nonetheless.  If you really wanted to stay out of debt and avoid the mortgage altogether, renting is your alternative. 

There are too many emotional factors for the question should I buy or should I rent?. I recommend step away from the emotions and run your numbers as best as you can, also ask help to a non-profit housing counseling agency. 

So, at this point maybe you should have the answer to the question Should I buy or Should I Rent?