Renting versus Buying a Home

Renting vs. Buying

In many cases, the amount of money a renter spends on rent can be about the same as or less than the amount a homeowner spends on a mortgage. With the tax benefit for homeowners, the savings can be significant. Your income, savings, and monthly expenses play an important role in determining how large a home loan amount you can afford.

When buying a house, you receive the equity as your property appreciates over time. When renting you do not receive the money that comes with increased value, because whoever actually owns the house actually earns the equity.

When you decide to purchase a home, you accept responsibility for paying for these expenses. They are additional costs to your monthly mortgage payment and should be included in your budget estimates:

  • Property Taxes and Special Assessments
  • Home/Hazard Insurance
  • Utilities
  • Maintenance
  • Home Owner Association (HOA) Fee: Doesn't apply to all purchases. It pays for trash and snow removal and maintenance of common grounds if applicable.
  • Membership Fee: It may pay for recreational facilities and other services (cable TV).

Considering the Benefits to Home Buying Versus Renting

  1. No competition, just you and the seller.
  2. Both parties benefit because the seller enjoys reduced selling costs without using a listing broker.
  3. Can be completed with or without a real estate agent.

Read the Original ABC Article, Buying Versus Renting.