Buy a Home vs Renting One
It’s cheaper to buy a home than renting it. This stat holds true in most U.S. housing markets, according to the real estate site Trulia.
The reasons: Home prices are still falling and mortgage rates have remained at or near historic lows for months – while rents are on the rise.
Trulia looked at asking prices for rentals and homes for sale, while also factoring other costs such as taxes, insurance and maintenance.
Buying a home is much more affordable compared to renting in some areas with low vacancy rates where rents have increased in recent years.
Your income, savings, and monthly expenses play an important role in determining how large a mortgage you can afford.
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.
Monthly Expenses When You Buy a Home
Your rental company takes part of your rent payment to cover certain housing expenses. When you decide to buy a home, you accept responsibility for paying for these expenses (listed below). They are additional costs to your monthly mortgage payment and should be included in your budget estimates:
Property Taxes and Special Assessments
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).
Although there are many things to consider when deciding which is cheaper for you, to buy a home, or to rent one, we hope this article has helped you in the planning stages.
If you have any questions about the difference in buying a home versus renting one, please contact us for a free, no obligation consultation.