Myth: Renting is easier and cheaper than buying.
That is the common misconception.
"I'll just rent, because I don't have money for a down payment."
"I'll just rent, I don't want to make a lifelong commitment."
We're here to debunk this myth! Renting is often more expensive than buying, and buying does not have to be a lifelong commitment.
Average Rental Payment Upfront:
Security deposit: $1,800
Total down payment: $5,400
+ rental fees, pet fees, rent raises, etc = approximately $7,000
Average Down Payment on a Mortgage:
House price: $200,000
Down payment rate w/ FHA loan: 3.5%
Down payment: $7,000
Down payment using our First Time Home Buyers' program: $6,000
- Buying is, in fact, cheaper than renting, especially over time. With a rental, you'll often have to pay first, last and security deposit, plus a pet fee if you have a pet (per pet), rental fees including insurance, taxes, maintenance, HOA fees, application fees, background check, transaction fees, rent raises, and more. Your upfront cost will be approximately the same as a down payment for a mortgage, and the cost over time will most definitely exceed your costs when buying. Buying will save you money in the long run.
- According to Trulia, homeownership is 38% cheaper than renting, calculated putting 20% down on a 30-year fixed rate loan.
- Once you buy, you can start building equity. By paying your rent, you're actually building equity for your landlord. Instead, you could be investing in yourself, so it's worth finding out if it's doable for you. By owning the asset that is your home, you will be increasing your net worth, and helping yourself out in the long run. Whether you decide to keep the house and continue building your equity, or selling the house for a profit, it's not an investment that has to last forever, but it is an investment that will make you money.
- Your home's value can increase over time, instead of your rent payment increasing over time against your will. This means that your net worth will grow with the value of your home, or you can profit greatly by selling it. Especially if you invest in your home and make improvements, or the city makes developments like a nearby Starbucks or new school, your home will appreciate and your future investments will only get better. Investing in real estate is an excellent idea for anyone, and you may be able to do it sooner than you think.
- This is another reason buying is better than renting, you can invest in your home! When you move into a new house or apartment, you often have a vision of how you can make it your own. If you own it, you're able to do just that. You can make all the changes you want, and you'll WANT to invest more time into your home since you own it! You will have full control over remodeling and customizing the place that you spend most of your time.
- Another positive is that part of your mortgage payment is tax deductible. You are paying tons of taxes if you are renting. Taxpayers who have a mortgage may be eligible to claim a mortgage interest tax deduction, and most homeowners can deduct ALL of their mortgage interest.
- Like we said before, your investment doesn't have to be life-long. You can buy a house and rent it out for passive income! Or, say you go out of town and won't be living in your home for a few days, you can even make an income renting it out for that week. There are so many ways to make income from real estate investments, by doing hardly anything!
- If you do decide to hold on to your investment, it's something that you can make last forever. You could pass it down to your children, or sell it and retire rich, moving away to your dream beach retirement home. When buying, you can get a serious bang for your buck.
Buying a home could be a reality for you - NOW!
You don't have to buy your dream home as your first investment. Renting is a black hole. If you're able to sign a new lease, there's a good chance you'll qualify for an FHA loan. Check out our First Time Home Buyers Program to see if you qualify.
If you're not ready to buy a home, but you know you will within the next 5 years, we also offer a Lease Program with the Option to Buy within 5 years where you can shop for homes available for sale on the market, rent them out at a regular leased rate, and then buy them later on down the road if you decide you love it.
McBride Realty Group, LLC
Your Property Masters