The Cost of Renting vs. Buying a Home
Friday, November 15, 2019
Are you trying to decide whether you should rent or buy your home?
But with so many variables entering the equation, it can be daunting to sit down and calculate everything by hand. This rent vs. buy calculator makes the math easy so you can determine the total estimated cost of renting vs. buying. Simply provide the required inputs, compute your totals, and print out a detailed report! As powerful as this renting versus buying calculator is, there are more factors to consider besides just financial cost.
Whether to rent or to buy the place in which you live is a major decision. It doesn’t just affect how much money you have left at the end of the month, it also affects your lifestyle and the size of the savings you accumulate over the years. Every day, people buy homes when financially they’d be better off renting because it’s important to them to have a place to put down roots and because they see owning a home as an investment that can grow and as a source of tax deductions. Similarly, people rent all the time for the flexibility and minimal responsibility it offers, even though they’d amass a larger net worth over time if they bought a place.
Buying a home can be an investment and offers the certainty of a fixed mortgage payment, but it also comes with a lot of unexpected costs — and it can take a while to build equity, she said. Renting is typically more affordable and flexible, and offers an opportunity to build greater savings, but gives residents less control over the property.
Here are some expenses you’ll be “throwing away money” on as a homeowner that you don’t have to pay as a renter:
- property taxes
- trash pickup
- water and sewer service
- repairs and maintenance
- pest control
- tree trimming
- homeowners insurance
- pool cleaning (if you have one)
- lender-required flood insurance, in some areas
- earthquake insurance, in some areas
Thank you for reading!