4 great reasons to rent

Before the housing boom went bust this year, homeownership was considered a good investment. But now, with the rash of mortgage foreclosures, renting may be a more attractive option. Here’s why.

1. Renting can save money
According to popular myth, renters are just throwing their money away. But the reality is that when you buy a home, you’re paying for closing fees, mortgage interest, property taxes, private homeowners’ insurance and maintenance — costs that return nothing on your investment. You’d be better off banking that money or putting it into the stock market. In fact, a recent study by Fidelity Investments indicates that stocks provided investors with nearly 4.6% higher average returns in the past 45 years than real estate.

2. Homeowners’ tax deductions are overstated
Conventional wisdom says that buying a home saves you money because the mortgage interest is tax-deductible. But a study by the National Multi Housing Council – a national advocacy group representing the interests of large apartment firms in the U.S. -- points out that half of homeowners don’t get a break, because even with mortgage interest and property taxes, their total deductions do not exceed the standard federal tax deduction ($10,900 for couples and $5,450 for singles).