Renting VS Owning

Renting

Owning

What You Pay For

Rent
(and possibly renter's insurance)

What You Can Deduct on your Taxes

Nothing

* Interest on mortgage, and property taxes
* When you sell your home, you don't have to pay any taxes on the gain, in most cases. Whoa!

How you can build an investment

Take the money you would have spent on a down payment and invest it or out it in savings.

Your house is your investment. If you put 10% down, you own 10% of the house when you start.

As you make monthly mortgage payments for 15-30 years, you'll gradually own more and more of the house.

How you could mess  up this investment

Fail to invest your extra money somewhere else. In that case, you have no investment.

Possible mistakes include:

• Paying more than the house is worth
• Paying more than you can afford (in which case you could lose the house by failing to make payments)
• Paying too much interest.

Pros

* Simple
* Start investing right away, without having to save for a down payment
* Easier to move if you decide to relocate
* No cost or effort spent on maintenance
* If your rent is low enough, this could be a better investment than house-buying.

* Pride and comfort in owning your own home.
* Ability to customize the home exactly how you want.
* Money that you pay towards the home loan is like paying yourself.
* Mortgage payment stays the same over 30 years. If you were a renter, your rent would definitely go up.
*You can deduct the interest you pay on your mortgage.
* You leverage you're your money by buying the home with (mostly) the bank's money. If you put $10k down on a $100k house, the whole $100k appreciates, not just the $10k you put down.
* When (if) you sell your home, you don't have to pay any income tax on the gain. Whoa!