Buying VS. Renting Your Home

T. J. Jones
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Keller Williams VIP Properties

Featured Articles

• Buying vs. Renting Your Home

• Buy vs. Rent: Pros and Cons

• Buy vs. Rent: Cost Comparison

• The Trivia Block





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Buying vs. Renting Your Home

Is now the right time for you to buy a home? You have many options to consider and choices to make. Buying a home is a big responsibility, financially and emotionally, but, most people want to own a home. Homeownership often is referred to as "the American dream." Why is it so special? Among the reasons: Real estate often is an excellent investment, perhaps the number one source of wealth-building for families.



Owning a home has many benefits. When you make a mortgage payment, you are building equity - and that's an investment. Owning a home also qualifies you for tax benefits that may assist you in dealing with your new financial responsibilities - such as homeowners' insurance, real estate taxes, and upkeep - which can be substantial. But given the freedom, stability, and security of owning your own home, they are definitely worth it! Owning your own home also can be a great source of pride and stability.



But homeownership may not be for everyone. It's a big financial commitment - starting with the initial shock of your purchase (including a "down payment" and fees paid to a real estate agent, the lender and others) followed by years of monthly mortgage payments, real estate taxes, property insurance and maintenance costs. When you decide to purchase a home, you accept responsibility for paying for these expenses. They are additional costs to your monthly mortgage payment and should be included in your budget estimates: Property Taxes and Special Assessments, Home/Hazard Insurance, Utilities, Maintenance, Home Owner Association (HOA) Fee if applicable.



One of the advantages of renting is being generally free of most maintenance responsibilities and the flexibility of moving almost as soon as you decide. But by renting, you lose the chance to build equity, take advantage of tax benefits, and protect yourself against rent increases. Also, you may not be free to decorate without permission and may be at the mercy of the landlord for your housing needs. There are many considerations in choosing between renting and buying:

• Do you want to spend several years in a house and in a neighborhood?

• Do you enjoy lawn and garden work?

• Might you need to move suddenly to care for family?

• Do you want to keep your assets accessible in the bank, or do you want to invest long-term in a home?

There are tax advantages to homeownership in both the short and long terms. The mortgage interest and real estate taxes are tax deductible, which allows you to subtract part of your housing-related expenses from your taxable income, which could reduce your tax bill. In many cases, the amount of money a renter spends on rent can be about the same as or less than the amount a homeowner spends on a mortgage. With the tax benefit for homeowners, the savings can be significant.

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Buy vs. Rent: Pros and Cons

. Advantages Considerations

Buy Property builds equity Responsible for maintenance

Sense of community, stability, and security Responsible for property taxes

Free to change decor and landscaping Possibility of foreclosure and loss of equity

Not dependent on landlord to maintain property Less mobility then renting

Rent Little or no responsibility for maintenance No tax benefits

Easier to move No equity is built up

. No control over rent increases

. Possibility of eviction



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Buy vs. Rent: Cost Comparison
The chart below shows a cost comparison for a renter and a homeowner over a seven year period. The renter starts out paying $800 per month with annual increases of 5%.



The homeowner purchases a home for $110,000 and pays a monthly mortgage of $1,000. After 6 years, the homeowner's payment is lower than the renter's monthly payment. With the tax savings of homeownership, the homeowner's payment is less than the rental payment after 3 years.

Yrs Rent Mortgage Payment Monthly Diff. After Tax Savings Yearly Diff. After Tax Savings

1 800 1000 -200 -50 -2400 -600

2 840 1000 -160 -10 -1920 -120

3 882 1000 -118 +32 -1416 +384

4 926 1000 -74 +76 -888 +912

5 972 1000 -28 +122 -336 +1464

6 1021 1000 +21 +171 +252 +2052

7 1072 1000 +72 +222 +864 +2664

8-30 . . Savings increase every year



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The Trivia Block

Who said, "Real Estate is the best investment in the world because it is the only thing they're not making anymore?"



Will Rogers, stage and film star, who began his career as a rope-throwing cowboy.



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Monitor Your Credit Report and Help Guard Against ID Theft

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T. J. Jones

Keller Williams VIP Properties

Featured Articles

• Monitor Your Credit Report and Help Guard Against ID Theft

• How to Minimize Your ID Theft Risk

• The Trivia Block

http://Jonescrestproperties.com

Monitor Your Credit Report and Help Guard Against ID Theft
You probably know something about the problem of identity theft - situations in which a con artist uses someone else's name, Social Security number or other personal details to make purchases, take out loans or commit fraud in the name of an innocent victim. But do you know how you, with the help of credit reports and credit bureaus, can help spot or stop the theft of your identity?



First, here's why you should care about fighting ID theft. It is, by far, the most common fraud complaint that consumers bring to law enforcement authorities and consumer protection groups. And while federal laws and industry practices can limit your liability if you become a victim of identity theft, it can take you a very long time to repair the damage. That includes notifying creditors and law enforcement that you've been victimized, closing tainted accounts and opening new ones, and correcting your credit report. You also may be denied loans, jobs, housing, insurance or other opportunities if an ID theft shatters your reputation and credit rating.



So, how can you use your credit report to protect against identity theft?



Monitor your credit report for warning signs, including loans or leases that have been wrongfully taken out in your name. Also, pay close attention to the "inquiries" section of the report that shows who has requested a copy of your credit history. That's because thieves sometimes impersonate business people with a legitimate right to obtain credit reports.



In general, you should consider obtaining copies of your credit report from the three major credit bureaus about once a year to verify that the information is correct. But be aware that there are services that will frequently monitor your credit report for possible signs of fraud or theft. The fees for these services (often $70 or $80 for a yearly subscription) can be more costly than obtaining periodic credit reports on your own, but the added level of convenience may be worth the cost.



If you find suspicious transactions on your credit report, take the following steps:



Contact creditors to discuss questionable items and close accounts that you believe are fraudulent or have unauthorized transactions.



Call the fraud department at each of the major credit bureaus to ask that a "fraud alert" be placed in your file, so that lenders will be alerted to the fact that you may be a fraud victim. Ask that the fraud alert state that you do not want new credit extended without contacting you first.



Contact the local police to file a report. Keep a copy in case you need it later as proof of the crime.



Consider filing a complaint with the Federal Trade Commission (FTC), which will store the information in its database so that it can be accessed by law enforcement agencies worldwide.

What's In Your Credit Report?

A credit report contains information on where you work and live, how you pay your bills, and whether you've been sued, arrested or filed for bankruptcy. Consumer Reporting Agencies (CRA) gather this information and sell it to creditors, employers, insurers and others. The three major national credit bureaus are: Equifax, Experian, and TransUnion.



As of September 1, 2005, all consumers are eligible to receive a free annual credit report from each of the three major CRAs. The information in your credit report is used to calculate your credit score - a number generally between 300 and 850 that rates how risky a borrower you are. The higher your score, the less risk you pose to creditors.



Anyone who denies you credit, housing, insurance, or a job as a result of a credit report must give you the name, address, and telephone number of the CRA that provided the report. Under the Fair Credit Reporting Act (FCRA), you have the right to request a free report within 60 days if a company denies you credit based on the report.



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How to Minimize Your ID Theft Risk

When it comes to identity theft, you can't entirely control whether you will become a victim. But there are certain steps you can take to minimize your risk.

• Order a copy of your credit report.

• Place passwords on your credit card, bank, and phone accounts. Avoid using easily available information like your mother's maiden name, your birth date, or a series of consecutive numbers.

• Secure personal information in your home, especially if you have roommates, employ outside help or are having work done in your home.

• Ask about information security procedures in your workplace or at businesses, doctor's offices or other institutions that collect your personal information.

• Don't give out personal information on the phone, through the mail or on the Internet unless you've initiated the contact or are sure you know who you're dealing with.

• Confirm that you are dealing with a legitimate organization before you share any personal information. Check an organization's website by typing its URL in the address line, rather than cutting and pasting it.

• Treat your mail and trash carefully.

• Promptly remove mail from your mailbox. If you're planning to be away from home and can't pick up your mail, call your post office to request a vacation hold.

• Always shred your charge receipts, copies of credit applications, insurance forms, physician statements, checks and bank statements, expired charge cards, and credit offers you get in the mail.

• Don't carry your Social Security number card; leave it in a secure place. Only give your Social Security number when absolutely necessary.

• Carry only the credit, debit and identification cards that you'll actually need when you go out.

• Be cautious when responding to promotions. Identity thieves may create phony promotional offers to get you to give them your personal information.

• Keep your purse or wallet in a safe place at work; do the same with copies of administrative forms that have your sensitive personal information.

• When ordering new checks, pick them up from the bank instead of having them mailed to your home mailbox.

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The Trivia Block

If the heads on Mt. Rushmore had bodies, they would be nearly 500 feet tall!



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