Should I Rent or Buy a House?

You currently rent. As a renter, you've watched your monthly payments go into the pockets of your landlord with nothing to show for your investment. While owning your own house can seem complicated -- you have to prime your finances and budget for the project, you need to learn all about mortgages and loans, and you need to master the art of negotiating with sellers -- the process of buying is easier than it may seem from afar, provided that you do good research and get involved with savvy people who can help you with budgeting and accounting./

The ?pros? of home ownership are myriad. You get to build equity in your home. Whereas your rent payments quite literally disappear, your mortgage payments go towards paying off your home loan. The money that you put into your house actually gets pooled, and it can be tapped into to be used as a line of credit or to fund a refinancing venture down the line. Thus, once you get over the hump of initial financing, your money works double duty -- you can pay for your house and you can develop a source of credit.

In addition, if your property appreciates in value, you reap the benefits. If you are renting currently in an expensive location, like West Hollywood in California, you are not earning any money on the appreciation of your property. If you own your apartment, condo, or home, on the other hand, you're generating more capital just by riding the climbing market.

Homeowners are also entitled to numerous tax breaks. If you want to build an addition, install eco-friendly windows, or put in a security system, not only can you finance your efforts using your equity, but you can also improve the resale value of your home and qualify for deductions, come April 15th.

Finally, owning a home is an education. As you pursue your financial goals, you want to learn as much as you can about the markets, about money management, and about budgeting. Hunting for a home, closing on loan, and keeping up with your mortgage payments will all teach you valuable financial lessons which you can put to use as you pursue wealth building in other domains of your life.