Houses - Still Better Than Money in the Bank

by : Kevin Bilberry

It is obvious that we are in an unprecedented realty situation at the moment. Losing your home is listed as one of life's major crises, up there with death and divorce, and yet this crisis is predicted to continue for another year. It raises the question in many people's minds - is it worth buying your own home?

The U.S. Census Bureau released figures proving that the fourth quarter of 2007 shows the largest ever annual decline in home ownership since they started monitoring the figures back in 1965.

In a three year period we have gone from the highest national percentage of home ownership to the lowest. In 2004 home ownership was recorded as being at 70%. One in ten Americans were said to have a second home. By December 2007 the figures had dived to a nationwide percentage of 67% of home owners.

Many people have been burnt by the foreclosure crisis, and those who have had to walk away from their homes may not want to try to buy a house again. Do the disadvantages of renting really justify buying your own home? For the people who have lost everything, including their credit rating, the answer is probably 'no'.

However, they were the scapegoats whose misery forced the government to admit that legislation over lending practices was needed. It is almost guaranteed that this type of situation will never be allowed to develop again.

What are the advantages of buying your own home, and do they outweigh the rental options? In some cases it could be argued that it depends on the type of place you may be either renting or buying. There are rent able places that have most of the features that we want in a single family dwelling.

For instance, if you want a yard for your kid to play in, then you can rent a townhouse. If you want to have extreme luxury, you can search out that type of condo. You can rent a home with as many as three bedrooms. On first glance it would seem that buying has no advantage over renting.

However, there is one major 'abstract' factor that is the reason why many people chose to buy. No matter how regularly you pay your rent, and no matter how many rent installments you have 'put by' in the bank, you are not 100% safe in your rental home.

At any time you can be given notice to leave. Your kids may have to leave the school district, your friendly neighbors will be no more and all your life patterns will suddenly be changed. Security is probably the biggest single reason to explain why we struggle to buy that first piece of property.

Security is a very important requirement in our lives. We just take it granted that whatever place we choose to 'hang our hat' will be our home, and stay that way, until we say so. This is the most common reason for buying a home and not renting.

There are many other 'plus' factors in buying as opposed to renting. Some reasons will be particular only to each householder's requirements, but many of them are common to all; here are a few reminders:

Your children can play in their own fenced back yard.

It is a way of saving money: it may be long and slow, but rent never accrues in your favor.

You can claim tax relief against the interest on your mortgage.

By the time you are drawing old age pension and living on a limited income, you will have finished making the payments on your house. You never finish paying rent.

Your life can be more independent with less rules and less need to consider others.

Knowing that you are a home owner will be a boost to your self esteem.

Finally, the price of real estate, in spite of downward hiccups, has always gone progressively upwards. Even now, house prices are still up from a few years ago. In the last ten years the value of a home has almost doubled. That is a big return for your savings and not one that any bank can match!