Owning the Only Way to Go.

4 keys to profitable home ownership

You are most likely to win by owning, rather than renting, if the following are true:

• You plan to stay put at least three years and preferably more. In most markets, it can take three to six years for a home to appreciate enough to offset the costs of selling and moving.
• You are psychologically prepared. Home ownership means dealing with whatever comes up -- from noisy neighbors to clogged plumbing. You cannot just call the landlord for help or pack up and move as easily as when you were renting.
• You have some extra savings. Home buyers who spend every dime they have buying a house inevitably are blindsided by repairs, maintenance and all the other costs of owning a home. Then they go into debt trying to keep up their current lifestyle. Smart home buyers make sure they have an amount in savings at least equal to two mortgage payments after the home closes, and preferably more.
• You manage your money well. That forced savings aspect discussed above works only if you can keep your hands out of the cookie jar. Otherwise, it is too easy to drain away your wealth with home equity loans and lines of credit. If you are the kind of person who lives on credit cards and does not know where the money goes, you would be smart to clean up your financial habits long before you go to buy a house.

 

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