Tuesday, August 4, 2009

Rent vs. Own – a snapshot

Buying a home will be one of the largest financial investments you will make. It is important that you decide what is best for you. As a real estate professional I like to provide the tools to buyers so they understand why it may be a good time from being a renter to a home owner.

Here is a rent vs. own comparison that should illustrate the advantages of owning a home:

Purchase Price                                          $250,000
Mortgage – 5% for 30 years                 $241,250

Monthly Payment (Principal and Interest)     $1,295.08
Taxes and Home Insurance                                        450.00
Total Monthly Payment                                   $1,745.08
Less monthly tax savings                                            332.95
Less monthly appreciation                                         625.00
Less monthly principal reduction                            296.61
NET Cost of Owning                                               $490.52

Monthly rent for comparison                             $1,600.00
Less net cost of owning                                                  490.52
Monthly cost of renting vs. owning        $1,109.48
Annual cost of renting vs. owning                          $13,313.75           

Above analysis courtesy of Florida Realtors Magazine ®

If you would like more information about the home buying process or how to get started, please click on our buyer link for more information.