Should You Keep Renting or Should You Buy?
Should you buy or rent?
This is a question most of us will likely face in our lives, whether buying a house makes more financial sense than renting a home. There is a way to understand the financial impact of buying vs. renting. The realtor.com® rent vs. buy calculator can help you calculate the total cost of buying a home versus the cost of renting over time.
For buying, the total costs compare the total amount of money you would be spending over time, minus the potential value you might receive if you someday sell the property. From the tool, you’ll see that the amount of time you plan on keeping the home has a major impact. To get more personal, you can customize the advanced options to crunch more specific numbers and evaluate more specific scenarios. But keep in mind that a financial comparison is just one of many factors when deciding whether to rent or buy.
Another important factor to consider when determining if you should rent or buy is that home ownership helps build long term wealth.
If you get a fixed-rate mortgage, your mortgage payment can never change. When renting, you are at risk of the rental payment rising every year. When a homeowner is making a mortgage payment, a portion of that payment is paying the loan down each month, giving the owner more equity in their home. However, when renting, the entire portion of a renter’s monthly payment is going to a landlord, helping them gain equity.
Owning a home is an investment that appreciates. Not only are you able to live in the home and use it, when you sell, you will likely make more than you spent and won’t be subject to taxes on the increase. Homeowners are also allowed to deduct mortgage interest when they file tax returns each year. This is a large deduction for many and results in fewer taxes paid.
At Palm Tree Coastal Realty, we offer a Home Buyer Workshop every month. Its about an hour session that will help get you acquainted with the home buying process and will help you decide if now is the time to consider home ownership.
Give us a call to schedule a Home Buyer Workshop session for a time that is convenient to your schedule. We look forward to meeting with you and answering any questions you might have.
Darcy Varney, Broker-in-Charge
Palm Tree Coastal Realty