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Buy vs. Rent

The Advantages

There are many advantages to buying a home versus renting one.  If you
compared only the monthly rent cost versus a monthly home mortgage cost, 
the rent cost will typically be about the same as or less than the monthly house payment.  After accounting for the tax benefit for homeowners, the home ownership savings can be significantly higher.  The chart below, Buy vs. Rent Snapshot, will provide a general estimate of savings.  For a detailed financial comparison of buying versus renting, use this link provide by Realtor.com 
http://www.realtor.com/mortgage/tools/rent-or-buy-calculator/?source=web


Buy vs. Rent Snapshot

The chart below shows a cost comparison for a renter and a homeowner over
a seven year period.


-  The renter starts out paying $800 per month with annual increases of 5%
-  The homeowner purchases a home for $110,000 and pays a monthly
    mortgage of $1,000
After 6 years, the homeowner's payment is lower than the renter's payment
-  With the tax savings of homeownership, the homeowner's payment is less
    than the rental payment after 3 years

 

Years
Rent Payment
Mortgage Payment
Monthly Difference
After Tax Savings
Yearly Difference
After Tax Savings
1 800 1000 -200 -50 -2400 -600
2 840 1000 -160 -10 -1920 -120
3 882 1000 -118 +32 -1416 +384
4 926 1000 -74 +76 -888 +912
5 972 1000 -28 +122 -336 +1464
6 1021 1000 +21 +171 +252 +2052
7 1072 1000 +72 +222 +864 +2664
8-30     Savings increase every year

 

 

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Timothy Hansen

Phone: 405-812-4646
amfamilyhomes@gmail.com

American Family Homes

Real Estate Team