The government offers several financial incentives to homeownership. From tax credits to deductible interest, buying a home and having a mortgage can reduce your tax burden significantly.

But renting makes a lot more sense if you aren’t tied to a geographical area — say by industry or family — because you have the freedom to move to where the jobs are without having to go through the process of selling your house.

Also, if you live in an area where housing prices are exorbitant, your monthly rent payment might be half what a mortgage would be on an identical property. (This article from TIME magazine explains the concept of price-rent ratios well.)

In areas with rent control, you would probably end up financially on the same footing or better as homeowners by renting long term.

A friend of mine from college grew up in a spacious Manhattan loft that his family has been living in since the 1970s. They pay a shocking $400 per month in rent. Even though they have built no equity in their housing, assuming they’ve invested the extra money they’ve saved by not paying a mortgage, they could be in a very rosy financial picture indeed. (Especially considering how much better the stock market has performed over the past 30 years than the housing market.)

Houses do have emotional value that apartments do not, but as far as finances go, there are several sound reasons to rent. The $8,000 home buyers credit that expires soon is tempting, but as always, consider all angles and read the fine print before you commit to a life-changing financial decision.

We had a great group for the presentation (check out the presentation here).

For those that were interested and unable to attend we will be hosting a make-up session on Tuesday, September 1, 2009 at 10:30am.

Have a question you want answered on the financial crisis? Post it in the comments!