http://activerain.com/blogs/joanprout en-us 557737 <p>Renter, paying <strong>$3000/mo.&nbsp;</strong>&nbsp;</p> <p>OR</p> <p>Purchaser of a $500,000 condo with $8000/yr. in taxes and $500/mo. Maintenance.&nbsp; (assuming a $450,000 mortgage w/ a 30-year fixed rate mortgage @6.5%, which comes out to a <strong>monthly payment of $4,011)</strong></p> <p>&nbsp;Okay, this was probably a no-brainer.&nbsp; (I'm a real estate agent...)</p> <p>The purchaser spends less.&nbsp; But how much less?</p> <ul> <li>Less than $1000</li> <li>$1000-2000</li> <li>$2000-3000</li> <li>Over $3000?</li> </ul> <p>&nbsp;The answer is <strong>over $3000</strong>.&nbsp; (<strong>$3,328.09</strong>)&nbsp; The difference is due to your Federal income tax payment.&nbsp;&nbsp; If you earn over $78,850 (single) you are in AT LEAST the 28% tax bracket.&nbsp; (A dollar earned puts 72 cents&nbsp; in your wallet.)&nbsp;&nbsp; The purchaser can take a tax deduction of $37,250.&nbsp; The monthly income tax reduction is $869 and the principal on the mortgage is paid down by $419, so the purchaser pays $277 LESS each month than the renter does.&nbsp;&nbsp;&nbsp;</p> <p>Put another way, over the course of a year, the renter pays more than 13 months rent (Taxtember?&nbsp; Your Uncle Sam thanks you for the additional $869/mo.)</p> <p>If this makes sense to you, let me know.&nbsp; You can buy a VERY nice condo in Jersey City for $500,000.&nbsp;&nbsp;</p> <p>&nbsp;</p> <p>&nbsp;</p> <p>&nbsp;</p> Joan Prout (RE/MAX Villa REALTORS) Thu, 19 Jun 2008 14:40:07 -0500 http://activerain.com/blogsview/557737/Whos-ahead-at-the-end-of-the-year-the-renter-or-the-buyer