Better off renting or buying?

The push for an ever-increasing homeownership rate in this country recently led to a huge housing bubble, followed by a tsunami of foreclosures and declining home prices. Lax lender qualifications a few years ago fueled a run-up in home prices that couldn't last. It left many homeowners who bought beyond their means with damaged credit -- and without a home.

Homeownership has been the American Dream. But owning a home isn't for everyone. Factors often not taken into consideration by homebuyers: homeownership requires a lot of time, effort and a financial commitment that go beyond merely paying your principal, interest, property taxes and insurance.

In order to preserve the value of your property, you need to keep it in good condition. There's routine maintenance like clearing debris from the roof, gutters and downspouts. And occasionally there are larger projects to deal with, like replacing an entire roof or painting the exterior.

Homeowners often don't budget for these expenses and they're left with a home that has a lot of deferred maintenance. This has a negative effect on the property's value.

HOUSE HUNTING TIP: Practicing a regime of preventative home maintenance can save money in the long run. For example, if you caulk a shower to keep it from leaking, it can last for decades. If you don't, you'll end up having to replace the shower within a few years, which could cost $4,000-$6,000, depending on where you live and which finishes you use.

In addition to preserving the value of your investment, a well-maintained home gives the owner a sense of satisfaction often referred to as pride of ownership. Other benefits of owning rather than renting are tax relief, the possibility of equity build-up and appreciation over time, and the ability to modify your home to suit your wants and needs. You are master of your domain. ...CONTINUED

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