Should you rent or buy a home?

Should you rent or buy a home?

Why do so many people insist on renting a home or apartment before considering the options of buying? What many people don’t know is that owning a home has many more benefits when being compared to renting. Also, people don’t know that they can actually OWN a home that is either the same price or in some cases cheaper than paying for rent. I think the automatic perception of being a homeowner is that you can’t afford the payment. Well, I am here to let you know that is just not true.

Monthly Payment: Rent vs. Own

When renting, the monthly payment you make is basically being thrown out the window and making no investment in your future whatsoever. However, you are benefiting your landlord because you are basically paying their mortgage payment for them. (Which shows you actually can afford to pay for a mortgage).

You are not building any equity as a renter, but your landlord is building equity in their home.

When owning, you are making a monthly payment that is building wealth for your future. You are contributing to paying off your home and you are also building equity as your home value appreciates overtime. (Yes! Homes are still increasing in value overtime)

Risks: Rent vs. Own

When renting, you risk the monthly payment increasing overtime. You may also risk eviction for reasons such as the homeowner wanting to sell the home you are renting, or simply move back into it.

When owning, you have a fixed monthly payment. (Your payment will NEVER change). You will have financial stability knowing that there is no risk in the monthly payments increasing.

Tax Benefits: Rent vs. Own

When renting, you have NO tax benefits whatsoever. If you are renting a home, then your landlord actually receives all of the benefits you would have received had it been your own home.

When owning, you receive so many benefits as a homeowner it is crazy. Current tax codes really favor homeowners. As an owner you can deduct all the interest you are paying on your mortgage. You can deduct the property taxes you are paying on your mortgage. Also, if you decide to sell your home, all the capital gains you receive are not taxed. It is pure profit!

Are you still wondering if you should rent or own a home? I think you know the right answer.

 

Posted on November 7, 2011, in Mortgage, Real Estate and tagged , , , , . Bookmark the permalink. Leave a comment.

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