Renting vs Buying
Renting & Buying both have their respectful places in the world and it is always a debate of deciding when it is the right time to cross over from one to the other. Beyond the financial, the key motivating factors for short term living typically suggest renting. However, the long term aspects of homeownership are abundant.
Within the next 30 years…an individual renting at say $1000 per month will have spent over $360,000 in rent. This money is burned in flame and gone forever. The average median rental price in Grand Junction, CO was $911 in 2015 according to the department of numbers. This is a fairly standard scenario.
If you take an individual who purchases a home for $200k and has a monthly payment of $1275 with a locked rate. Within that scope of time that individual will have paid off their home in full and will own an asset worth approximately $300,000 or more!
This dual of renting vs. buying is simply no contest due to the drastic difference of $400k deficit vs. owning a $300k asset outright…that’s a $700,000 dollar difference.
Granted the cost of homeownership is slightly higher on a monthly basis, the long-term outcome is supremely advantageous.
Additional Exclusive Home-Ownership Advantages
*Tax Advantages- Tax Deductions on Mortgage Interest & A Portion of Property Taxes
*Appreciation- Real Estate accrues an average return of accelerated value between 3%-6% per year. (Think of grandmothers home value vs. when she first purchased.)
*Home Equity- Home equity lines of credit are available exclusively to homeowners and provides ample financial security and protection.
*Freedom & Enjoyment- Paint the walls pink, throw a dance party, and decorate to your maximum creativity. Homeowners have the ability to enjoy and relax with the gift of ownership.
Rental Advantages
*Short term goals- added flexibility, short terms leases…traditionally 1 year or even less, excellent for times of transition and uncertainty.
*Less commitment- many rentals may have integrated systems in place that cover maintenance and repairs, giving less responsibility to the tenant.
*Less immediate cost- traditionally the monthly cost of homeownership is slightly higher than the cost of renting.
Overall, I hope that you found this article to be helpful and insightful and if you have any questions, comments, and/or concerns, please feel free to reach out!
If any of these ideas and scenarios have motivated you to take a step closer toward the wondrous world of homeownership. Feel free to inquire further!
Highest regards & blessings,
Micah
