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Rent or Buy a Home – Insuring Your Property and Protecting Your Wallet

With the housing market in San Diego and across much of the US still struggling, the idea of new home ownership in our current economic climate has come with some trepidation. The consensus generally is that with home ownership you build equity and get to write off your mortgage interest. There’s also government incentives and the promise of turning a profit if and when you decide to sell your home. However consumer confidence remains shaky in the face of a weak job market, especially since San Diego remains one of the most expensive markets in the country.

So for many, the debate of whether to rent or buy has become a hot topic of discussion. Let’s take a look at what considerations you should have in making this decision. Renting is better if your rent is relatively low, especially if home prices in your area are quite high. Even in the down economy, the average price of a home in San Diego is above the threshold that many can pay.
Investing in a home also brings about many associated costs. Buying often costs more than renting: the rule of thumb is 30 percent more per month. Expenses of owning a home typically includes mortgage payments, property taxes and assessments, home and property insurance, utilities including water and trash, maintenance, and homeowner’s association fees to name a few.

Renting is better suited for those that expect to move in the short term (4-5 years), do not want the responsibility of tending to the property and paying for routine maintenance. Additionally, expenses such as HOA fees, water and trash are often times covered in the rent.

When it comes to protecting your personal belongings, you are required as a homeowner to hold homeowners insurance coverage, which protects both the structure, its contents and land. Many renters do not realize their personal property is not covered under their landlord’s homeowners insurance policy, or bother to take the precaution to protect their belongings.

So if you choose to go the renters route, whether you live in a single family home, duplex, townhouse, condo, loft, studio or apartment, renters insurance protects your belongings and your liability. So what exactly is covered when purchasing renters insurance? Typically your personal property would be covered in the case of a flood, fire, theft or vandalism. If you are a renter and have purchased a renters insurance policy, you will be reimbursed for temporary housing if necessary, and are also protected against liability if someone is injured in your home. Additionally, you often can bundle renters insurance with other policies such as auto insurance and receive a discount.

The bottom line is whether you choose the renter or homeowner path, expect to shell out a few of your hard earned dollars per month to protect your personal property. If you took a moment to add up the value of everything in your rented or owned home, you might be surprised to find out how much it’s really worth. Why wouldn’t you want to spend a few extra dollars a month to protect the belongings you’ve worked so hard for.

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