Buy vs. Rent Comparison

	Advantages	Things to Consider
BUY	Property builds equity	Responsible for maintenance
	Sense of community, stability, and security	Responsible for property taxes
	Free to change decor and landscaping	Possibility of foreclosure and loss of equity
	Not dependent on landlord to maintain property	Less mobility than renting

RENT	Little or no responsibility for maintenance	No tax benefits
	Easier to move	No equity is built up
		No control over rent increases
		Possibility of eviction

In many cases, the amount of money a renter spends on rent can be about the same as or less than the amount a homeowner spends on a mortgage. With the tax benefit for homeowners, the savings can be significant.

The chart below shows a cost comparison for a renter and a homeowner over a seven year period.

The renter starts out paying $800 per month with annual increases of 5%
The homeowner purchases a home for $110,000 and pays a monthly mortgage of $1,000
After 6 years, the homeowner's payment is lower than the renter's monthly payment
With the tax savings of homeownership, the homeowner's payment is less than the rental payment after 3 years

Years

Rent Payment

Mortgage Payment

Monthly Difference

After Tax Savings

Yearly Difference

After Tax Savings

1 800 1000 -200 -50 -2400 -600

2 840 1000 -160 -10 -1920 -120

3 882 1000 -118 +32 -1416 +384

4 926 1000 -74 +76 -888 +912

5 972 1000 -28 +122 -336 +1464

6 1021 1000 +21 +171 +252 +2052

7 1072 1000 +72 +222 +864 +2664

8-30 Savings increase every year

<< Back to Buyer's Guide

	Communities
	Homes for Sale
	Open Houses
	Home Designs
	Buyer's Guide
	Contact Us