When it Comes to Your Home, Owning is Better Than Renting
Are you trying to decide whether to buy or rent a home? Consider this: buying a home is often considered to be financially better than renting over the long run because your mortgage payments build equity in your home, which you will eventually own, while rent only goes toward the upkeep of your home and the pocket of your landlord. That is just one reason owning is better than renting.
Here are some others:
- You can do what you want with your property. Making home improvements will be your choice from colors to paint the walls to light fixtures to types of floors, you won't need permission from a landlord to make changes.
- Tax benefits. Tax deductions are a great perk of home ownership.
- Stable monthly payments. Rents can go up, but with a fixed-rate mortgage, your monthly payments won't change.
- Forced savings. Renting might seem less expensive in some cases (although right now, rents are notoriously high all the more reason to buy!), but would you actually save the money you don't spend on rent? Since your mortgage payments are building equity in your own home, which you can later sell for profit, it's like a forced savings.
Using a "rent vs buy" calculator on ZILLOW you can see how buying is a better option right here in Huntsville. For example, after 2 years, the total cost of homeownership (down payment, mortgage, taxes, etc.) for a $183,387 home in Huntsville would be $76,297. The total cost to rent the same house for that period would be $36,048. Renting would leave you with $40,248 in your pocket (including the money you didn't spend on a down payment). So, it looks like renting would be better financially, right? But wait not so fast. Let's look at what you gain over the same 2-year period if you buy. After 2 years, your home will have $60,740 in equity (available to you when you sell). However, if you instead rent and invest your down payment and the other money you save at a 6% return rate, it will earn around $4,240 in 2 years. So, if you look at your gross costs, equity, and investment potential, it's better for you to buy than rent if you plan to live in your home more than 2 years and 2 months.
The bottom line is, if you've been thinking about buying a home in the Huntsville area, don't wait! Start investing your money in your own home vs that of a landlord today!
If you are looking to buy or sell a home in the Huntsville area, let professional Realtor Mike Manosky help you with all your real estate needs! Give Mike a call today at 256-508-0211 and check out https://www.movetohuntsville.com/ for more information!
Photo credits: medium.com, forbes.com, investopedia.com