Renting an apartment or a house works well for young people fresh out of college, just beginning to establish them-selves in life. But there are many disadvantages of renting-and we won't even count the fact that you're throwing your money away! If you've been out in the work force for a while, it's time to take a look at buying.

1. Should I Rent
or
Should I Buy?

2. Disadvantages
of
Renting
Renting an apartment or a
house works well for young
people fresh out of college, just
beginning to establish them-
selves in life. But there are many
disadvantages of renting-and we
won't even count the fact that
you're throwing your money
away! If you've been out in the
work force for a while, it's time to
take a look at buying.

3. People who rent have no tax
advantages. When you buy a
home, there are many tax credits
for which you become eligible.
They include a deduction for
your mortgage interest, the sales
tax when you buy or improve
your home, and energy credits.
The property taxes you pay to
your state and local municipali-
ties are also deductible. These

4. days, the government has
created stimulus credits that put
money in first-time homeowners'
pockets. If you're still renting,
you're not taking advantage of
any of these.
People who rent never know
when the rent will change. Well,
actually you do know: You can
count on it going up every time

5. your lease renews. With these
tough economic times, there are
few landlords who can resist cost
-of-living increases in rents they
charge. If you own a home, as
long as you choose a fixed-rate
mortgage, your payments will
remain pretty stable. They might
fluctuate a tiny bit from year to
year if tax levies are passed or if
your homeowner's insurance

6. goes up. But basically, you're
looking at a stable amount.
People who rent never have
control over changes in their
homes. What if you want to paint
the kitchen in a bright, kicky
color scheme, but the landlord
says stick to white? What if you
know you could really improve
the logistics of the place by

7. knocking out a wall, or widening
a doorway between two rooms?
Again, you have no real say over
it. Some landlords have been
known to fuss over too many
pictures being hung on the walls.
The truth is, if you're paying to
live there, you should feel that
you can stamp it with your own
personality.

8. People who rent never build
up any equity. This goes beyond
the fact that you will just end up
with a drawer full of payment
coupons while your landlord
reaps all the tax advantages
of ownership. This also includes
any efforts you put into
increasing the livability or value
of the place. What if you really
want a garbage disposal in the

9. kitchen sink? What if you buy
some rose bushes to plant in the
yard? Maybe the landlord will
approve, but you know you won't
be taking it with you when you
leave.
People who rent cannot make
decisions about how they live.
There are too many rules! No
pets. No overnight guests. Your

10. kids must be quiet. No pool. Only
one car, park it in the driveway,
and guess what-you never get to
use the garage. And you can be
assured that however you do live
will be discussed by your land-
lord with every neighbor he
knows on the street.
The truth is that none of these
reasons bothers young people

11. people who are just leaving the
nest. They couldn't care less
about equity or home improve-
ments or tax advantages. What
does it mean if you are becoming
concerned with these issues? It
means you have reached a level
of maturity and commitment, or
a level of financial security, so
that you are ready to take the
step toward home ownership.

12. Five Advantages
of Owning Your
Own Home
It's time to buy your own
home. Your family and friends
are advising it, and you have an
unsettled feeling that your rental
place just does not satisfy. There
are many advantages to owning
your own home, and here are five
of them.
You will own a place that ap-
preciates in value. Yes, it's true,

13. despite the recent real estate
market problems. Remember
that scene in the movie, Gone
With the Wind, when Scarlett
holds up a fistful of earth and
vows that she and her kin will
never go hungry again? Even
though we've gone through a
recent downward spiral of home
values, in general real estate
holds its own very well. If you

14. buy a place now, your payments
will result in a chunk of equity in
future years that you can use
for many purposes.
People who own homes are
eligible for a variety of tax deduc-
tions. First, the year that you
buy your home you can deduct
the sales tax on the home plus
the tax on any points you paid at

15. closing. You'll also find that
energy-efficient home improve-
ments are often tax deductible.
The taxes you pay to your local
municipality and state are tax
deductible. Plus, every year
you'll get a statement from your
lender showing what part of
payments went toward interest
and what part went toward the
principal. The interest payments

16. are tax deductible.
It's possible to borrow on that
equity we talked about in order
to consolidate loans or pay off
big expenditures. In the past,
people could add up the interest
from all their charge card
purchases throughout the year
and deduct it at tax time. That
stopped in the mid-1980s. But if

17. consolidate some high-interest
loans and pay them off with a
home equity loan, the interest
on the home equity loan is tax
deductible.
If you decide to purchase a
home, it's a sign of status within
your community. While there are
many fine people who rent,
there's nothing like the feeling of

18. owning a parcel of land in the
place where you live. It gives you,
your spouse, and your children a
feeling of ties to the community.
If you want to establish a flower
or vegetable garden, you are free
to do so. You might discover a
motivation to become involved in
community activities, especially
since you've chosen a township
that you like and enjoy. And if

19. you do get involved, people will
respect your opinion.
Besides the feeling of stabili-
zation within your community,
you gain financial stabilization.
When you rent, you are subject
to rent increases per your land-
lord's whim. When you buy a
home, you achieve a stable
monthly payment as long as you

20. finance with a fixed-rate mort-
gage. But there's more to it
than that. Your credit score will
go up. It's true that the first year
it might dip a little, because
you've just taken on a huge
responsibility. But as you finish
your first year of on-time pay-
ments your credit score will most
likely go up. This will give you
better interest rates when you

21. apply for a car or other major
loan. Even your insurance rates
will be lower because they are
based in part on a good credit
score.
Welcome to the club!

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