Buy or rent vacation home
I own a home in Illinois and would like to move to AZ for the winter. I can afford to purchase a house there, but would I be better off financially to rent. My purchase price would be 150 - 170 K And rentals would be about 1400. a month on a year round basis.Thanks
Terry Says
Well, that's a tough question to answer because you've left out a lot of variables. First, do you think you're getting such a good price on the real estate and it will appreciate in future years? That's what you give up when you rent -- future price gains. And you give up being able to decorate the property according to your tastes, and leave your clothes and other personal things there when your rental expires. On the other hand, if you rent you do not have to worry about maintaining the property when you're not there, or having renters who damage your property, etc. You can just lock the door and leave when your rental expires. And if the community requires you to rent on an annual basis, check to find out what responsibility you have for the rental property --even if you're not there! Finally, what's your long term goal? Will you consider giving up your Illinois residency if taxes get too high (and don't forget estate taxes)? Then you might seek out a warmer, but lower tax state like Florida. In any case, it can't hurt to rent for a year to make sure you like the community. That's probably the way to start.
