Analysis on Renting or Buying a House

2751 Words11 Pages
Abstract Because of many factors and costs to consider, the decision to rent vs. buy continues to plague the minds of many. A strategy for one person may not be a prudent strategy for another. Hence, the answer is rather relative as oppose to an absolute or universal decision. The real estate market is one of a cyclical nature, with periods of ebbs and flows. However, the key is stability and longevity to withstand downturns. Executive Summary Whether to rent or buy is a question that looms in the minds of many. The answer simply depends upon the current market conditions and the needs of the consumers. Over the past decade, owning has been a financial success for most people, with prices rising almost in a straight line, with low, low interest rates feeding into the equation and with homeowners' equity subsequently bounding higher. Conversely, in certain markets such as New York, Baltimore, Raleigh, and San Antonio, the decision to rent is a prudent strategy in which the costs are more affordable. Housing prices are still out of reach for many in certain major metropolis. Additionally, factors and costs must be considered, such as return of investment, return on investment, interest rates, price to rent ratio, pros and cons of renting, pros and cons of buying, homeowner's insurance, rental insurance, neighborhood choices, and mortgage options. However, the most critical aspects that warrant primary evaluation are price-to-rent ratios and interest rates. These two
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