This is going to be a short post about how some people think about buying a house vs renting the apartment, town house, condo or even the single family home they’re renting.
First, there is nothing wrong with renting a place to live. Lots of people do it. In fact, I know people who have rented their entire lives. There are people who have been home owners who, for a variety of reasons decided to give up on home ownership and went back to renting.
Does It Make Economic Sense to Own a Home?
Depending on your situation, it may also make good economic sense to own a home. I have this cool spreadsheet that allows me to plug in some numbers and a few assumptions about how your home will increase in value over time. At the bottom of the spreadsheet is a number which tells you the difference between renting and owning a home. Sometimes the result is amazing.
Of course, from my point of view, the real benefit of owning a home is that you don’t have to worry about the landlord raising the rent or taking their sweet time to make repairs. Sure. When you own a place, the responsibility is yours. That also means you can do it yourself or hire in a contractor to take care of any problems. You can paint whatever color you like, make some renovations, whatever. You can also take the opportunity to get involved in the neighborhood whether it’s with the schools or local civic association.
My point here is that when people look at the cost of buying a house vs what they’re paying for rent, they need to take a lot of things into consideration. The monthly mortgage payment might seem higher, at first, but after looking at the tax deduction for the mortgage interest, the increase in the value of the house over time, and other factors you may find out that it is, in fact, cheaper to own than to rent.
Give me a call. I can run some numbers for you.
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