May 30, 2014
Deciding on whether to rent an apartment or buy a home has varying consequences from financial aspects, quality of life benefits and considerable cost differences over the long term. Read below to see why buying home might be best for you.
Financial
BUY
- Interest on mortgage taxand property tax may betax deductible.(ask your accountant)
- Building equity.You could use this for a Home Equity Loan.
- Any increase in value will go in your pocket when you sellyour home.
- Tailor your mortgage to meet your financial situation:30-yr, 15-yr, ARM, etc.There are many ways to make home ownership affordable.
RENT
- Rent is not tax deductible.
- No equity.You have no security against which to take out a loan.
- No profit gained whenlease ends.
- You walk away, no richer,no poorer.
- Rent cannot be customized or re-financed.You are most likely never locked in for more thanone year.
QUALITY OF LIFE
BUY
- That Home Equity Loan could pay for your child's college education or allow you to make purchases for your family.
- Your home is your castle, and you can truly make it your own. Decorate however you like: painting, carpeting,removing walls!
- Your pets have a yardto play in.
- You can try your handat gardening.
- You could use your basement for storage or a game room.
- You can finally park your car(s) in the garage.
RENT
- Paying rent builds your landlord's bank account,not yours.
- As a tenant, you are very limited with what you can do to your apartment. Remember,it's not yours.
- Your pets are often unwelcome, or have limited room toplay outdoors.
- You can nurture your potted plants.
- You are lucky to get a storage closet, for which you might have to pay extra.
- Good luck finding parking onthe street.
Cost Comparison* over 7 years
BUY
- Payment: $1,185
- Cash to Close: $4,375
- Equity Built: $28,800 (1% increase per year)
- Tax Benefit: $8,552(25%)
RENT
- Payment: $1,200
- Cash Upfront: $3,600(First & Last Months Rent, Security Deposit)
- Total Rent: $100,800
- Tax Benefit: $0
