Should you rent or buy? This is a question most of us will likely face in our lives. There are many factors to consider when deciding whether to purchase a property or rent.

Prior to the financial crisis in 2008, building equity was one of the main financial reasons prospective buyers jump into the market. Homeowners and prospective homeowners may now look more closely at the costs and benefits of such a large transaction.

A few reasons to rent include flexibility, career uncertainty, income uncertainty, bad credit, no maintenance expenses, and sometimes utilities! Renting allows you to explore an area before making the longer-term commitment to homeownership. Unless you are certain about a specific neighborhood, renting allows time for research and discovery. With career uncertainty, if you think you might need to move in the near future, or are mulling job changes that span several areas of town or are located elsewhere in the country, you might want to rent. Buying ties you down to a greater extent. Along with job uncertainty comes income uncertainty. If you expect a pay hike or cut in the near future, that can change your borrowing ability as well as impact your ability to pay a mortgage. Bad credit is something we all want to avoid, creating a history of on-time rental payments can help you build the sort of credit you’ll need to qualify for a mortgage. When a pipe leaks, you don’t head to the store; you head for the telephone and call the landlord. Utilities (sometimes) are included and in some instances, the landlord may pay for many utilities such as water, sewer, garbage, and, in some cases, even heat and hot water.

Some reasons to consider purchasing include building equity, tax deductions, creativity control, and maintenance choices. When you pay rent, you are paying your landlord’s mortgage or adding equity to his or her bank account. However, when you have a home mortgage, you increase your degree of ownership in your home with every payment. A general rule is that if you intend to stay in your property for at least five to seven years, the costs of purchasing the home are more likely to be offset by accrued equity and increased housing value. In the event that equity in the home grows to more than a 20-to-80 percent loan-to-value ratio, you will be able to borrow against your equity in the home. This can be cautiously used should you need capital to pay for major purchases. If interest rates drop, you can refinance your mortgage at more favorable rates, or, once you’ve paid the entire mortgage off, borrow against the equity in your home to fund major purchases such as a second home or your child’s education. Tax deductions are a big incentive. You can deduct mortgage interest as well as your property taxes. Uncle Sam doesn’t give renters this bonus. Not only that, but if you meet certain requirements the IRS won’t apply a “capital gains” tax on your profits from the sale of your home. You can keep the first $250,000 in profit you make when selling the home if you’re single, or the first $500,000 if married. In addition, those who work from home may be eligible to take deductions for their home office and portions of utilities. You like dozens of pictures on the wall? Well, hammer away — they are your walls now. Go ahead and paint them mango! Wish you had another room? Go ahead and add one. So go ahead, let your creative juices flow, your home is yours to make it your own. Along with the creative factor is the various maintenance choices you have. If you live in a house, you can decide how to approach maintenance, either doing it yourself or picking your own contractor. If you live in a condominium or homeowners’ association, you may pay a monthly fee to have maintenance work covered by the association’s contractors.

Mark Massey, the President and CEO of Evergreen Property Management, Inc. here in Fort Collins provided some insight about the increasing rents for 2 bedrooms and 2 bathroom apartments. For the past 5 years, rental rates have increased for 2 bedrooms/2 bathroom apartments. Mark states, “every credible source I have seen is predicting that although there may be a softening in the amount of the increases, rents are going to continue to go up for the next several years.”

In March, Trulia did a survey and the decision to buy or rent could depend on where you live, the differences between owning versus renting can be big or small. For example, in San Francisco, home ownership was found to be 19 percent cheaper than renting, whereas in Detroit owning a house is 70 percent cheaper than renting.

The following are places where home purchases exceed renting by the highest amounts:
Detroit
Dayton, Ohio
Gary, Indiana
Cleveland, Ohio
Warren-Troy-Farmington Hills, Mich.
Toledo, Ohio
Memphis, Tenn.-Miss.-Ark.
Kansas City, Mo.-Kan.
Birmingham, Ala.
Indianapolis, Indiana

Below are a few links for sites that will help you determine if you should rent or buy. Some have some Q&A and others have a calculator for you to input some numbers which can also help you decide whether it is a good time to buy or rent!

http://www.bankrate.com/calculators/mortgages/rent-or-buy-home.aspx
http://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html?_r=0&abt=0002&abg=0
http://partners.leadfusion.com/leadfusion/freddiemac/home10/tool.fcs?type=popup&width=590&height=670