Seniors: Buying vs. Renting

Jul 7th, 2011 | By | Category: Senior Moments Blog

These are no ordinary times.  Dickens would describe this time as the “best and the worst,” and would be correct on both counts.  What is going on?  There was a time when owning one’s own home was a secure investment, portending great promise as an investment and security for the future.  No longer!  Now having a home brings with it the fear and trepidation of being able to meet the mortgage, take care of upkeep, and paying all the insurance, taxes and other fees associated with home ownership.

Buying or renting is no longer a choice between two positive options.  It may be the lesser of available evils.  Affording one over the other is the consideration with the strongest pull.  Having a roof over one’s head, which can be afforded and will not be removed from above you is the desirable goal.

Evaluating the reality of your own personal situation should account for your decision whether to buy or own. Right now multiplied thousands are experiencing the dreaded prospect of foreclosure. Many have already done so. The security of having a home has been replaced with the prospect of being homeless, living in a shelter, a small motel room, an automobile, on the streets.

Most of us who are sitting before a computer are not facing that earth shattering state of affairs. Some may be sitting in a library or a coffee shop surfing the Internet. Others may be aware of the unemployment and down side to the economy and have given up.

The question here, however, is for those who may be in a position to either own or rent. Much of what is happening in the housing market seems to bend toward renting. Sure, you are not gaining any equity, but the likelihood of being in a safe position, when buying, also may pose serious and threatening consequences. If there is enough in your sock to afford monthly rent and utilities, projected over a period of time, this will at least allow assurance of a domicile and all its advantages. A mortgage is often less forgiving than a landlord. Negotiating with a landlord may allow for a face to face encounter in which some forgiveness or extension is available.

Buying in today’s market has advantages, again only if you are in a position to afford it. If you can secure a property at a much reduced cost, because of foreclosure or short sale options, you may come out a winner. Researching and being clear of all the implications will, however, be required. Do not set yourself up for surprises. Too many already have.

Renting or leasing may be to your best advantage, at least in the short term. While you are researching options, you may rent and maybe even negotiate an option to buy. In any case, keep yourself in the safest position you can be in with your available resources.

Funding your choice will be the primary consideration. If you do not have sufficient resources for a down payment, then clearly the next best option is to rent. If you are in a vulnerable position with your resources, calculating how you can rent, how long you can rent and what your choices might be if those resources are jeopardized will be a smart course to take.

The best position for a person who is looking for a long term solution to housing is to be sure you are able to cover all the deposits, if renting, and that you could stay in the home for a predictable period of time. If your circumstances are such that you would be back in the position of searching for a home again within a matter of months, proceed with caution. Of course, if your situation is one in which you are against the wall, you will need to choose with caution, but dispatch.

There are no easy solutions to this consideration. Buying or renting, in the best of all worlds, in which we do not currently reside, is one of those choices that needs to be made with considerable courage and inordinate wisdom. Weigh your situation accordingly and take the leap, hopefully having some kind of safety net which will catch you in the event of need.

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