You’re moving. You’ve found greener pastures, and are looking forward—a little excitedly, a little nervously—to your new surroundings. You’ll be asking a lot of questions during this time. One of the biggest is, where will you live? To be a little more specific, should you rent or buy?

Here are some questions to ask yourself as you’re weighing your options:[1]

• Can you afford to buy a house right now? How much money do you have saved?
• How long do you plan on staying in the area?
• Are you looking to settle down or do you want the flexibility to travel or move frequently?
• Are you handy? Are you inclined or willing to do home repairs or renovations?
• What are your goals involving your career and your family?

What are the advantages of renting? What are the benefits of owning? Let’s explore both sides.

Here are reasons why renting is good:[2]

• As a renter, you may have fewer maintenance costs and repair bills. If something that is part of the rental property breaks, it’s the landlord’s responsibility to fix it.
• You have access to amenities, such as swimming pools or fitness centers, that may cost homeowners bundles.
• The taxman doesn’t cometh. You won’t get a property tax bill.
• A tough housing market may spell bad news for homeowners, but renters are mostly immune to shifts in the real estate market.
• You can jump ship relatively quickly as a renter and move elsewhere. You’re responsible for selling your home if you want to downsize or move. If you’re not committed to living in one spot for at least three years, renting may be your best choice.[3]
• If you fall into dire financial straits, you’re not saddled with a hefty mortgage.
• As a renter, you don’t have homeowner’s insurance, which can range from $25 to $80 a month. Renter’s insurance is relatively inexpensive, at about $12 a month.
• Apartment renters usually have lower utility costs.

Here are reasons why owning a home is good:[4]

• Owning a home is generally a good investment. If you own your home for many years, it may increase in value.
• You’re able to create equity. Equity is the difference between what you owe and your home value. With each payment, you build equity. Here’s how it works. You have a $20,000 car, for example. You owe $9,000 on it. Your equity is $11,000. With your house, you can borrow against your home’s equity to meet other financial needs.
• You may be able to reduce the amount of income taxes you may owe. Federal rules may allow you to deduct mortgage interest. Tax law has changed so you should consult with a professional tax preparer to learn more.[5] You may be able to deduct more during the early years of your mortgage with higher portions of your monthly payment going to interest.
• Making consistent, on-time mortgage payments builds your credit history and may bolster your credit score. Lenders view you as a responsible borrower with a lower-default risk.
• You have the freedom to decorate or renovate your home as you envision. You can paint your walls whatever color you want. You can knock down walls, redo floors, lay new carpeting, and design your home to fit your tastes or personality—without seeking permission from a landlord.

As you weigh your options, you can use rent-versus-buy calculators to determine your best financial options. The calculators request you plug in specific information: zip code, target monthly rent, target home price, and available home price. The calculator then shows you which is less expensive, buying or renting. Go to https://www.trulia.com/rent_vs_buy/.

Bankrate asks you a series of questions to help you determine your best choice financially. The calculator asks a series of questions, including:

• How much of a down payment are you able to make?
• How much debt do you have?
• What percentage of a home’s value would you be willing or able to make as a down payment?
• What is your credit history?
• How long do you plan to stay in your new home?
• What are the average home prices in the area you’re considering?
• Do you plan to itemize your mortgage interest?
• What is the state of your budget?

To learn more, go to https://www.bankrate.com/calculators/mortgages/rent-or-buy-home.aspx.

We can help guide you in making the tough financial decisions. Working with an independent financial professional can help you build a strategy for the pursuit of your future goals.

Contact us today to learn more!

Kind Regards,

Brad Connors
President

Footnotes, disclosures, and sources:

Securities and Advisory Services offered through LPL Financial a Registered Investment Advisor, Member FINRA/SIPC.  These are the views of Platinum Advisor Strategies and not necessarily those of the named representative, Broker dealer or Investment Advisor, and should not be construed as investment advice. Neither the named representative nor the named Broker dealer or Investment Advisor gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your financial advisor for further information.

We have not independently verified the information available through the following links. The links are provided to you as a matter of interest. We make no claim as to their accuracy or reliability.

Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

[1] https://www.bankrate.com/mortgage/renting-vs-buying-a-home/

[2] https://www.investopedia.com/financial-edge/1112/reasons-renting-is-better-than-buying.aspx

[3] http://time.com/money/collection-post/2792045/rent-or-buy-my-home/

[4] https://www.discover.com/home-loans/articles/advantages-of-homeownership

[5] https://www.irs.gov/newsroom/interest-on-home-equity-loans-often-still-deductible-under-new-law

Last week, markets experienced a 4-day winning streak before dropping on Friday, November 9.  Despite those losses, domestic indexes posted gains for the week.  The S&P 500 increased 2.13%, the Dow added 2.84%, and the NASDAQ was up 0.68%.  International stocks in the MSCI EAFE had slight growth, ending the week up 0.20%.

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Markets posted strong gains last week after struggling for much of October.  The S&P 500 had its best weekly performance since May, and the NASDAQ had its first positive week since September.  Despite domestic markets dropping on Friday, November 2, the S&P 500 added 2.42%, the Dow increased 2.36%, and the NASDAQ gained 2.65%.  International stocks in the MSCI EAFE were also up 3.34%.

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Last week did nothing to dispel October’s reputation as a tough month for the market.  The S&P 500 lost 3.94%, the Dow declined 2.97%, and the NASDAQ dropped 3.78% during what was one of 2018’s most volatile weeks so far.  All three indexes are down significantly for the month, and both the S&P 500 and Dow have entered negative territory for 2018.

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Stock performance was mixed last week as investors considered the impact of interest rates, international affairs and corporate earnings.  The S&P 500 gained 0.02%, and the Dow added 0.41% to post its first weekly gains in October.  The NASDAQ declined 0.64% and extended its losing streak.  International stocks in the MSCI EAFE dropped by 0.08%.

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Volatility was back in full force last week.  The three major domestic indexes posted several days of losses before experiencing wide swings on Friday.  By week’s end, the Cboe Volatility Index (VIX), which investors use to help measure fear in the markets, had increased by approximately 70%.  The VIX also reached its highest point since February.

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Although new data continued to show strengths in the U.S. economy, markets stumbled across the globe last week.  The S&P 500 lost 0.98%, the Dow dropped 0.04%, and the NASDAQ declined 3.21%.  International stocks in the MSCI EAFE struggled, posting a 2.35% loss.

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Friday, September 28, was the last trading day in 2018’s 3rd quarter, and the S&P 500 posted its strongest quarterly return in nearly 5 years.  The Dow also showed impressive returns by beating expectations for the quarter, while the NASDAQ notched record highs against 2017 numbers.  For the quarter, the S&P jumped 7.2%, the Dow increased 9.3%, and the NASDAQ moved up 7.1%.

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Last week brought new tariffs and data, and another look at changes coming to equity classifications.  Overall, the S&P 500 gained 0.85% and the Dow was up 2.25%, while the NASDAQ dropped 0.29%.  International stocks in the MSCI EAFE had sizeable growth, posting a 2.89% increase.

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Last week, the East Coast prepared for Hurricane Florence, which roared through the Carolina’s and Georgia.  As investors kept their eyes on the weather and its potential for destruction, estimates emerged of up to $27 billion in hurricane damage.  This potential for damage contributed to insurance companies in the S&P 500 declining last week.  While the hurricane likely won’t have a large effect on our economy, its destruction could influence data for months to come.

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