Renting Versus Buying
There is nothing like putting hundreds or worse
yet thousands in a envelope and then loosing it - imagine how you'd feel.
Imagine if you did it twice or even three times! You'd feel sick. Well your
loosing money like that each and every month if your paying rent. Worse part is
your not only loosing it - your handing it over to your landlord! If you were to
buy a average home on the market today for $150,000 instead of renting - in the
next ten years you would be $113,141.29 RICHER! That's a lot of money!
Here let's break it down and compare the
benefits of owning your home compared to renting:
If you bought a house for $150,000, and put ZERO
DOWN and lived there for ten years, you would save $130,383.09 over
that then year period! This assumes the following:
1. A conservative annual rate of property
appreciation of 4%
2. An yearly increase of rent of 5%
3. An estimated return on investment (ROI) at a rate of 6%
4. A projected yearly real estate property tax rate of 0.80% of the purchase
price
5. A yearly hazard insurance rate of 0.31% of the purchase price
6. A yearly cost of repairs and maintenance of 1% of the purchase price
7. A comparable home rented for $850 monthly
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Projected Monthly Savings:
| |
RENT
|
BUY
|
| Monthly payment |
$1,000.00
|
$1,056.00
|
| Monthly tax savings |
-
|
($202.86)
|
| Monthly After-tax payment |
$1,000.00 |
$853.14 |
Projected Long Term Savings:
| |
RENT
|
BUY
|
Total payments
(5% annual rent increase) |
$(158,481.45)
|
$(126,720.00)
|
| Tax savings |
-
|
$24,343.20
|
| Property appreciation |
-
|
$72,036.64
|
| Investment income |
-
|
-
|
| Maintenance costs |
-
|
($15,000.00)
|
| Total costs |
($158,481.45)
|
($44,340.16)
|
| Total Savings |
|
$113,141.29
|
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