4 Reasons Buying is Cheaper than Renting in the Long Run

Often, when it comes down to the choice of renting or buying a home, people opt to rent. It’s simply “cheaper,” at least in the short term. And while certainly there are people who might struggle to be able to afford buying a hoe, the truth is that renting is only cheaper in the short term. In fact, a recent report from Trulia showed that buying a home is 26.3% cheaper than renting in 98 out of 100 metro areas in the United States. In certain areas of Texas, it’s actually 30% cheaper to buy your home than it is to rent.

Mortgage Payments vs. Monthly Rent

In both the cases of renting and buying, you will have to make monthly payments. However, monthly mortgage payments are finite and cover the cost of the house which you already own. Even if you rent the same home for over 30 years, you will still have to pay rent — monthly rent is infinite so long as you live in the house. Additionally, your mortgage loan is based on the lender’s review of your credit and finances, and there’s a little room for flexibility. In the case of rent, on the other hand, it’s difficult to choose an “income-based” plan. What you see is what you get, and in some cases, the landlord may even be able to raise the rent.

Buying Offers More Stability

One of the downsides to renting is that you’re essentially at the mercy of your landlord. If you don’t pay on time, they can legally evict you. However, even if you make every payment on time, ultimately you’re living in a property that someone else owns. They might decide to sell it or to move into it themselves. Going back to the point about renting the same home for 30 years, the reason that’s such an unheard of number is because of the natural instability of renting a home. So chances are, if you rent, you’ll have to move around and the cost of moving itself can be quite expensive. On the other hand, when you buy a home, it’s yours — unless you fall so far behind on mortgage payment that it would be seized by the bank. You can stay there for as long as you choose.

Buying Offers a Bigger ROI

When you rent a home and decide to move, you may be able to get your deposit back, but that’s about the only return on investment you’ll find. You don’t get to enjoy any increased home value, though your landlord might. However, when you buy a home, that’s an investment. You can upgrade it and boost your home value, so that when you move, you’re able to sell it for more money than you originally bought it. Keep an eye on the changing housing market, however, especially the appreciation and depreciation of the value of homes in your neighborhood.

Buying Offers Tax Benefits

Buying a home means you’re subject to property taxes, but mortgage debt and other property taxes can be itemized as tax deductions to help you save come tax time. In many areas, making energy efficient upgrades will also allow you some tax benefit. Again, when you rent a home, that’s all out of your hands.

See the big picture when it comes to buying your home? Next, talk to a College Stationrealtor about finding the perfect home both for now and for an investment in the long-term.