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Buy, Rent or Rent To Own? The very first thing you should decide is what type of living best suits your needs and capabilities. Should you buy a house, rent an apartment or rent to own a home? Rent Renting is probably the most flexible of the options. You aren't locked in for the long term in most cases, and you can move more easily and more quickly because it isn't you who has to find the new tenants. Also, you usually aren't responsible for maintenance on your home in most cases. However, as a renter, you don't build up any equity (the difference between the current value of a property and the amount owed on it). You simply pay rent every month for a place to live, and you don't get to benefit from any future increases in the value of the property. As an owner with a mortgage you have a kind of "forced savings plan" because part of your monthly mortgage payment goes toward the reduction of the amount you owe on the property. Combine this with a typical increase in property value over time, and you will have a valuable asset. You can't say that about renting.

Furthermore, you miss out on some of the benefits of home ownership when you rent. You won't be getting a tax benefit based on your rent. However, if you have a mortgage, you will get a tax deduction based on the mortgage interest you pay. This is regarded as one of the few tax benefits still available to most people.

Another negative about renting is the inevitable rent increase. You don't have any control over that. While a homeowner does face increases in property taxes, he can lock in his principle and interest payments with a fixed rare mortgage. Property tax increases are typically less than rent increases. So, after a period of time, the home owner will usually pay less per month than the renter.

Buy

Opposite of the benefits of renting, buying a home means:

• you are responsible for maintenance of your home. You could buy a condo or townhouse and have the outside maintenance done for you, but you will have to pay for this service in the form of association fees.
• You have to pay property taxes. Of course, whether you realize it or not, a landlord typically passes on the cost of property taxes by including it in the rent he charges
• Home ownership means more responsibility and risk. If something goes wrong financially, you could lose your home to foreclosure. While not paying bills can have nasty results for both renters and home owners, it's usually nastier if you are a home owner because you could lose most, if not all, of the equity that has been accumulated on the property. Also, it's not as easy to move when you own. You can't just pick up and go; you'll have to sell your house as well.

However, in spite of the negatives regarding home ownership, there are a number of really good reasons to buy:

• The first of these is that you are building equity in your home. As you pay down your mortgage, and/or your property appreciates in value, your equity increases. Remember, equity is the difference between the current value of a property and the amount owed on it. If you are renting, it is the landlord who benefits from increases in equity, not you.
• If you own your home, you are free to decorate and renovate as you prefer. The home is yours! You don't have to get a landlord's permission to paint. When you own a home, you can put your own stamp on it. You also are not dependent on a landlord to maintain the property in any way. If something needs to be fixed, you can get it done on your time schedule.
• You may be eligible for tax benefits if you own your home! Most homeowners will be able to deduct the interest costs attached to their mortgage from their tax burden. This can result in some significant savings that you only get as a homeowner.
• While you may not be able to move as easily when you own, you also build a sense of community and stability. You become invested in your neighbourhood. You put down roots. While this is not a benefit that's easy to categorize, there is something special about a sense of "home".

Rent To Own

By far the least common and riskiest way to get a home, rent to own can be a viable alternative for the right circumstances. Rent to own can be considered a hybrid between renting and owning. Part of the contractual agreement between the landlord/seller and the renter/buyer is something called a purchase option.

If you are unable to get approved for a sufficient mortgage loan due to a poor credit rating, bankruptcy or some other unusual circumstance, the rent to own approach may be for you. But do your homework first. This is a fairly complex process, and it usually involves individual investors, not banks or other lending institutions. For an explanation of this approach, you should check out JSC Rent To Own Homes.