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Why You Should Consider Renting

By Derren Peters

While the classic American Dream may be to buy a home of your own, the new realities of the current financial market make that a pipe dream for some. For these folks. renting is a wise option. Renting provides the pride and security of having a roof over your head ? minus the prolonged financial obligations and liabilities of a mortgage.

It's important to understand your financial picture before plunging into the market. In a worse case scenario, defaulting on your mortgage can torpedo your credit. In a still-recovering job market, loss of employment can turn the American Dream into a nightmare of foreclosure or a never-ending short sale.

Home ownership comes with several expenses, from initial costs (down payment, lawyer and inspector fees, closing costs), to yearly bills (taxes, repairs, insurance) that add little to your actual equity in the home but are necessary to keep hold of it. That said, property taxes, mortgage interest payments, and in some cases, a portion of the common charges, are tax deductible.

Financially, renting typically costs less in the short term than owning. Rent payments ? and the lack of the aforementioned repair bills and taxes ? benefit those needing to keep their expenses low. If you're planning on staying put in your next residence, ownership does begin to pay off after a number of years.

Renting a home or apartment does keep you under the thumb a landlord (part of the reason many folks want to own), but the presence of a landlord removes the burden of repairs. Water leak? Heating system acting up? Call the landlord.

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