Photo courtesy American Advsiors Group
Photo courtesy American Advsiors Group

Potential home buyers face a hard decision when deciding whether to rent or to buy, one that could leave them "house-poor" if it is not handled correctly. Forbes contributor Steve Udelson believes that potential home buyers must decouple "investment" from "consumption" in order to make the best decision for themselves.

He points out that rent is flexible and a home is liquid investment. This investment, for example, links you to the area in which you choose to buy:

For example, if you’re buying a home in Cincinnati you’re really investing, in part, in the future prospects of Procter & Gamble and other major employers in the area. Now, if you are buying the home in a stable or appreciating neighborhood this investment will still make plenty of sense, plus you’re deriving high consumption value from living in the home.

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