Buy a New Home or Rent?

Home Buying Guide: Rent vs Own

There are many advantages to owning your own home instead of renting. From a financial standpoint, the only one who truly benefits from paying rent is the landlord.

If you choose to rent, you’ll never see your monthly rent payment again. As a home buyer, part of the monthly payment goes towards purchasing an asset that can be sold down the road. The rest of the monthly payment will go towards the loan interest, which is totally deductible. And in many cases, the amount a renter pays can be about the same as or less than the amount a homeowner spends on a mortgage.  

The Savings of Buying a Home vs Renting
If you currently rent and are considering buying, take a look at how your housing payment could be put to better use purchasing a home. The real question should be whether you can afford to ‘not’ buy your home.

You can compare the difference between renting a property or buying a home by using a rent vs buy calculator. There are several easy-to-navigate calculators that can be found on the internet.

You can get obtain valuable information without having to plow through the fees, taxes, and monthly payments - such as:

• Payment comparison before tax savings
• Payment comparison after tax savings
• Tax considerations
• Investing compared to appreciation of home
• Rent vs own savings

Based on the number of years you plan to keep the home, a rent vs buy report can clearly show you the amount you ’save’ by buying a house vs renting.

Home Owners Expenses
Of course, homeowners do have some expenses that renters don’t have to deal with. Costs such as real estate taxes, maintenance and repairs, homeowners insurance, homeowners association fees, and buying and selling costs - to name a few.

Out of pocket expenses can vary depending on the location of the home, it’s condition when purchased and how long the owner plans to hang on to it, and what type of home (condominium, single-family, townhouse) it is.

Down The Road
Most homeowners will sell their homes at some point. When this happens, they get a great tax break - a capital gains tax exclusion - which renters don’t reap the benefits on. If you sell your primary residence that you have lived in for at least two of the previous five years, your can hang on to profits up to $500,000 (filing jointly) or $250 (filing-single) - tax free. This makes buying a new home an even better investment option.

Advantages of Owning
Most homeowners enjoy many less tangible  - but real benefits - compared to renters. In general, homeowners have more freedom of lifestyle, the pride of owning, a sense of stability and security, more community involvement and  closer neighborhood friendships that last.

 So, If  you’re currently renting and are planning to make a move in the near future, why not consider the advantages of buying a new home instead.

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