Is it Always Better to Buy than to Rent? Think Again...

So, I'm at that tender age, when I must decide, do I want to continue renting an apartment... or invest some money in a house? The funny thing is that, I always thought that buying was the better option... always in any realistic scenario... but the more I research, the more I find out that is simply not always the case.

Check out this great article from the NY times. It does a very similar analysis to what my friend Mahim did... wtg Mahim! It takes into account the money you spend on a mortgage after accounting for things like tax-breaks and compares it to the money you would spend on renting, after accouting for the money you would save by renting, which is assumed to earn a decent interest... and in today's bloated-housing market, renting wins almost every time.

In fact, if you ever consider 'trading-up' by buying instead of renting, if nothing else, remember the rule of 20... If the price for a house is more than 20 times the rent you would pay to live in it for a year... then its probabaly not a good bet.

Of course, owning a house is a privelage with perks that are priceless, so it will always be better to buy if you want a family-home you plan to spend the rest of your life in. But if you plan to sell within 5 years, then buying is a very bad option in comparison to renting, especially in areas like NY and California.

Just read the article, even if you disagree... you may learn something.