|
There are many advantages to buying
a home versus renting one. View these advantages in the Buy vs.
Rent Comparison Chart.
Savings: Buying
In many cases, the amount of money a renter spends on rent
can be about the same as or less than the amount a homeowner
spends on a mortgage. With the tax benefit for homeowners, the
savings can be significant.
Rent vs. Buy Comparison
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 annual increases of 5%
- The homeowner purchases a home
for $110,000 and pays a monthly mortgage of $1,000
- After 6 years, the homeowner's
payment is lower than the renter's monthly payment
- With the tax savings of
homeownership, the homeowner's payment is less than the rental
payment after 3 years.
|
Years |
Rent Payment |
Mortgage Payment |
Monthly Difference |
After Tax Savings |
Yearly Difference |
After Tax Savings |
|
1 |
800 |
1000 |
-200 |
-50 |
-2400 |
-600 |
|
2 |
840 |
1000 |
-160 |
-10 |
-1920 |
-120 |
|
3 |
882 |
1000 |
-118 |
+32 |
-1416 |
+384 |
|
4 |
926 |
1000 |
-74 |
+76 |
-888 |
+912 |
|
5 |
972 |
1000 |
-28 |
+122 |
-336 |
+1464 |
|
6 |
1021 |
1000 |
+21 |
+171 |
+252 |
+2052 |
|
7 |
1072 |
1000 |
+72 |
+222 |
+864 |
+2664 |
|
8-30 |
|
|
|
Savings increase every year |
Monthly Expenses: Buying
Your rental company takes part of your rent payment to cover
certain housing expenses. When you decide to purchase a home,
you accept responsibility for paying for these expenses (listed
below). They are additional costs to your monthly mortgage
payment and should be included in your budget estimates:
- Property Taxes and Special
Assessments
- Home/Hazard Insurance
- Utilities
- Maintenance
- Home Owner Association (HOA)
Fee: Doesn't apply to all purchases. It pays for trash and
snow removal and maintenance of common grounds if applicable.
- Membership Fee: It may pay for
recreational facilities and other services (cable TV).
Advantages of Buying vs.
Disadvantages of Renting
|
|
Advantages |
Disadvantages |
|
Buy |
|
Property
builds equity |
Responsible for maintenance |
|
|
Sense of
community, stability, and security |
Responsible for property taxes |
|
|
Free to
change decor and landscaping |
Possibility of foreclosure and loss of equity |
|
|
Not
dependent on landlord to maintain property |
Less
mobility than renting |
|
|
|
|
|
|
Rent |
|
Little or
no responsibility for maintenance |
No tax
benefits |
|
|
Easier to
move |
No equity
is built up |
|
|
|
No
control over rent increases |
|
|
|
Possibility of eviction |
Get started in the
search for your home today!
Realty Icons recommends you
get
pre-qualified for a mortgage loan so you know how much of a home to
search for. Try our
Rent vs. Buy Calculator
Questions? Call us at 713 956-6252
or Email us info@realtyicons.com |
