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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: TheStockFairy who wrote (1319)	1/10/2002 2:47:11 PM
From: Tradelite	Read Replies (1) \| Respond to of 306849

If you can live rent-free somewhere, I suppose that would be OK. However, if you have to pay hefty monthly rent typical of metro areas, I know of no way that long-term home ownership would not be a better investment. Property taxes are 100-percent deductible so they don't count at all. Mortgage interest is deductible against income, so the government basically subsidizes somewhere around 25-30 percent of monthly house payments for most people. The government does not subsidize rental payments, so the renter is out 100 percent every month and has nothing to sell or show for it when it's time to move. Sure, one has to pay for maintenance, but that money is generally returned in a higher sales price when the home is sold, especially if the house has been held long-term and had time to appreciate in value. Any argument that renting is more financially beneficial than owning is very difficult to win. The only people who can benefit more from renting are people who know they will be living in a particular place for only a year or two or three. In that case, they probably shouldn't pay the closing costs associated with buying and selling, because they won't have a chance to recoup their costs.