Renting vs. Owning

By
Real Estate Agent with Keller Williams Realty

  

Considering Home Ownership in 2008, but don't know where to turn, give me a call and I can help inform you on the benefits and the process of Home Ownership!

  

Renting vs. Owning

 

Although some renters believe that renting is "maintenance free," they are actually paying for maintenance in their rent - whether they need it or not.  Renting offers you no equity, no tax benefit, and no protection against regular rent increases.  If you're paying rent, you're really just paying someone else's mortgage.  Let's compare.*

 

Rent          vs.            Own

Monthly Payment

$1,000

Monthly Payment

$   855

Insurance

$     30

Insurance

$     50

Taxes

$       0

Taxes

$   260

 

 

MIP Insurance

$     45

Total Payment

$1,030                                     

Total Payment

$1,210

 

 

 

 

Savings

Interest Deduction

$       0

Interest Deduction

$ 175

Tax Deduction

$       0

Tax Deduction

$   75

 

 

After Tax

 

Net Monthly Payment

$1,030                                 

Net Monthly Payment

$ 960

 

* Approximate Payment/Cost Comparison based on estimated annual tax results.  Based on 2.5 tax bracket and on estimated first year interest and taxes.  Recommend consulting with tax expert.  Payment based on FHA 30-year fixed rate loan with 7% interest rate, sales price of $125,000 and a loan balance of $121,250.  Interest rate/rental rates, prices, terms, and availability subject to change without notice.  See a qualified tax consultant for more details.

 

 

Comments (3)

Anonymous
Anonymous

Well since there are no homes for sale where I live for 125,000 (at least not in an area you won't get shot) but there are places to rent for 1000 (in nice areas with parking where I won't get shot) you agree -- I shouldn't buy.

 

Thanks, I was on the fence.

 

 

Apr 25, 2008 12:19 AM
#1
Peter Nikic
Broad & Bailey Realty LLC - Valhalla, NY

Kelly, I think there is potential with this. I've been wanting to hold buy vs rent seminars for a while now. There is a lot of info online now as compared to a couple of years ago. NYT has a great buy vs rent calculator, but there are many other as well.

http://www.nytimes.com/2007/04/10/business/2007_BUYRENT_GRAPHIC.html

 

Apr 25, 2008 12:24 AM
Peter Nikic
Broad & Bailey Realty LLC - Valhalla, NY

To the anonymous poster, your options are limited by your desire. Look at the NY Times buy vs rent calculator.

When you are ready to start looking and thinking, find a good buyers agent in your area. btw, this is not easy, but then life itself is not easy.

Apr 25, 2008 12:30 AM