The Truth Behind Renting vs Buying in Today's Market
Are you doing the math these days around renting versus buying a home? Trying to decide if you can afford to buy? If so, there are a number of key factors to consider in making your decision.
Things to Consider When Comparing Renting vs. Buying a Home
1. A mortgage is a surefire way to build wealth. Your mortgage is like a mandatory savings account. A portion of your payment each month is going straight into your equity in your home. With renting, it’s your landlord who is building equity, not you.
2. The tax situation may have profound implications. Typically your mortgage interest and property taxes are deductible on your income taxes. Note: early on in a traditional mortgage you pay the most in interest and your deduction is the highest.
3. Renting puts your wallet at the mercy of the market more often than buying. If you have a year-long lease in an apartment, your rent could go up significantly should the rental market heat up. Your rent isn’t likely to stay the same over a long period of time. In most cities, in fact, it will steadily go up. With a standard mortgage, however, your payments are fixed and predictable. It might seem like a lot at first, but if you buy within your means, it’ll seem like less and less of an expense as the years go on.
4. A mortgage gives you more future financial flexibility. The longer you have a mortgage, the more equity you build. The more equity you build, the more options you have to borrow against that equity or use it in ways which may be advantageous for debt and tax purposes. With renting, no such long-term benefit exists.
Ready to Buy?
The key to home ownership is accepting the fact that you must buy a home you can afford which is priced in accordance with the market. Even if you’re not ready today, having a conversation with a Realtor® will help you decide if now is the time to buy or prepare for tomorrow.
Contact Us to schedule a free consultation. Whether buying or selling a home on the Treasure Coast we are always happy to meet with you at one of our five convenient locations to discuss your wants and needs, no obligation.