Why renting might be better than buying

With home prices continuing to drop, many realtors say
it’s a great time to buy. But a noted Seattle real estate
analyst says there are a number of good reasons to rent
instead.

“There are just so many factors to consider,” says Tim
Ellis, publisher of Seattle Bubble.

The biggest factor? Mobility.

“A lot of people really benefit from being able to pick up
and move if they get a better job offer or they find out
they don’t like a neighborhood,” Ellis said.

Economics are also a major consideration. It can cost a
lot less to rent than buy in some neighborhoods.

Many also fail to calculate the real cost of buying and
selling a house when they determine value. Realtor
commissions, taxes and home improvement costs can all have
a major impact.

“Many people just imagine the price they paid, subtract it
from the selling price and that’s their profit,” Ellis
said.

“It works out to be about 10 percent of the home’s value
that you
end up flushing down the toilet, as they say, when you
actually go to sell your house and that’s something a lot
of people don’t really consider when they’re buying a new
home.”

According to Ellis, another common myth is that real
estate is a great financial investment.

“There are so many other better options if you want to
actually invest your money than buying your own personal
home. That’s just what people tell themselves to justify a
decision they wanted make anyway,” he said.

But Ellis isn’t anti-home ownership – he bought a new home
last year and has no regrets. He just thinks people need
to give such an important decision much greater
consideration than many do.