Buying versus Renting

Monthly Expenses: Buying A Home

When you rent a property, your landlord uses part of your rent to cover specific housing expenses.  When you purchase a home, you are now responsible for paying all the expenses that your landlord took care of before.  They will add costs to your mortgage payments and should be included in your budget.

• Property Taxes
• Home Insurance
• Utilities
• Maintenance

Saving Money In The Long Run

The chart below shows a cost comparison for a renter and a homeowner over a seven year period.

• The renter starts out paying $800 per month with a typical 5% yearly increase
• The homeowner purchases a home for $110,000 and pays a monthly mortgage of $1,000
• With the tax savings of home ownership, the homeowner’s payment is less than the rental payment after 3 years !
• After 6 years, the homeowner’s payment is lower than the renter’s monthly payment !

Buying versus Renting

There are many things to consider when thinking about buying or renting.  Below is a chart that highlights some of the pros and cons you will face as a homeowner:

Benefits of Buying A Home:

• Property can build equity
• Sense of security and stability
• Freedom to do home improvements
• Tax breaks

Beneftis of Renting:

• Less responsibility for maintenance
• Easier to move

Things to Consider When Buying A Home:

• Home maintenance
• Property taxes
• Loss of equity
• Less mobility to move

Things to Consider While Renting:

• Rent payments increasing
• Eviction