Many will tell you that home ownership is a big part of the American Dream. Some even claim that it is the American Dream. And for many, it remains true. That little piece of ground you can call your own somehow makes life more worthwhile for many, despite the costs of a mortgage, homeowners insurance, property taxes, and upkeep.

For others, however, home ownership is seen as just another bill, or, more accurately, series of bills. And these bills come attached with what amounts to a second job, keeping the household running.

No one would argue that buying a home makes more sense on paper in most cases. If you can afford the mortgage payments, the very fact that you build equity and, at the very least, can sell the home when you’re ready to move, recovering most of what you put into it is a major reason to consider buying instead of renting.

But, that’s also the rub. In today’s housing market, there are no guarantees that you will recover everything that you put into your home. The days of buying property with the virtual promise that the value would be going up every year are gone, at least for the foreseeable future. With falling property values common in many parts of the country, you may even lose some of your investment if you need to sell, especially if you need to sell in a hurry.

And, in today’s uncertain economic times, with an unpredictable job market, selling in a hurry might very well be necessary. Renters enjoy a good deal more flexibility when it comes to pulling up stakes and moving to a new community as job prospects and offers become available.

So, should you rent or should you buy? Nobody can really answer that but you, but here are a few tips:

• Don’t buy a home unless you’re sure you want to live in the area. It can be better to spend some money in rent than to be tied to a mortgage in an area of the country you don’t want to live, especially if property values aren’t rising there.

• Educate yourself on mortgage terms before buying. Recent news should be an eye opener, but unfortunately, many people haven’t spent the time really figuring out what the various terms mean, and how different types of home loans could affect them.

• Stay within your means. Whether you are renting or buying a home, your total housing costs, including upkeep and maintenance, taxes, renters or homeowners insurance and more should not exceed 25% of your gross income. Spending more on a home is a recipe for foreclosure at worst, and migraines at best.

In short, if you can afford it, plan on sticking around, and want to own a home, buy. If you’d rather avoid being tied to an area, or the extra work that goes into owning a home, rent. It’s ultimately up to you.

Photo via Chad Jones