Why Rent When You Can Own?
You probably are comfortable renting because you don't have to worry about maintenance, HOA fees and staying in one place for over a year.
What you don't realize is that you are putting your money down the drain instead of investing it for your future.
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 |
Annual Difference |
After Tax Savings |
| 1 | $800 | $1,000 | -$200 | -$50 | -$2,400 | -$600 |
| 2 | $840 | $1,000 | -$160 | -$10 | -$1,920 | -$120 |
| 3 | $882 | $1,000 | -$118 | +$32 | -$1,416 | +$384 |
| 4 | $926 | $1,000 | -$74 | +$76 | -$888 | +$912 |
| 5 | $972 | $1,000 | -$28 | +$122 | -$336 | +$1,464 |
| 6 | $1,021 | $1,000 | +$21 | +$171 | +$252 | +$2,052 |
| 7 | $1,072 | $1,000 | +$72 | +$222 | +$864 | +$2,664 |
| 8-30 | Savings increase every year | |||||
Source: www.ginniemae.gov
The key is to know how much you can afford and invest in a home. Consult with Margie Bryant for professional real estate information.
All information in this report is deemed reliable, but not guaranteed.