Part of the American Dream has always been equated to owning your own home. Owning your own home is not for everyone. What does owning your home really mean to you? Does owning your home mean you have arrived and achieved the dream?

There is also the question – Is it better to own your home or is it better to rent? This question is answered by your own personal situation.

For some, it is better to buy/own their home. They look at this as an investment, one day they will own it and it will be paid off. There used to be a mortage burning celebration/party when someone paid off their home a long time ago. It was a big deal to pay off your home. Today, because people are so transient, the length of time they stay in their homes now is typically between 5 – 7 years. You rarely hear about a mortage being paid off or a large celebration. Owning your home has some benefits. You have some interest tax deductions when you file your income taxes, you own the property once it is paid in full. There are also a few downfalls in owning your own home such as you pay for all of the maintenance and upkeep of the property, the utilities, insurance, real estate taxes, and any remodeling or up grading that may need to be done or you would like to do. Your monthly payments go to the asset that you own. This asset can either appreciate or depreciate depending on the state of the economy, the location, and the condition of the home.

Since we are such a transient society the next question is – Is it worth it to rent? When you are renting, you are in essence paying on someone else’s investment. However, this has its perks. When you rent, the landlord is responsible to maintain the property. They are usually responsible for mowing the lawn and maintaining the yard. (This depends on your lease and if you are renting in an apartment building or a single-family residence.) Everything pertaining to the property, maintenance and upkeep will revert back to the language in the lease on who is responsible for these items. Renting gives you more flexibility if you should need to relocate to another state or you just want to move to another area of town.

Real Estate is similar to the game of Monopoly. Do you buy the property or not? If you buy it, are you going to be able to collect rent if someone lands on your property? Are you going to buy more houses and/or add a hotel? Is the price right or are you buying it too high just to own it? Can you afford to keep it or are you going to lose it back to the bank? Are you going to sell it to the right bidder, so they own the whole group of properties?

You need to look at your motive for purchasing a piece of real estate. Is it to personally live in? Are you purchasing for an investment? Are you purchasing by yourself or with a partner? Why you are purchasing a piece of real estate will help you determine how much you are willing to pay for a piece of property along with the condition and the location of the home.

Purchasing real estate is a major purchase and you need to be committed to making this decision. You will be paying on this purchase for almost half of your life if you take out a 30-year loan or get a second mortgage or refinance the property. You will not really know the property until you live in it. You will find out things that you did and did not know about the property once you obtain possession. This is the fun part. Moving in and learning all about your new purchase.

On the next post we will talk about Condo’s, multifamily properties, commercial properties and/or vacant land unless there is a specific question pertaining to real estate that you would like answered. If so, send me an email or comment on this post.