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Jessica Kimball, REALTOR's Blog

By Jessica Kimball, REALTOR | Agent in 06437

Owning vs. Renting

   Owning vs. Renting

 

Our goals are simple -- to ensure that you're happy with the
home you buy, that you get the best deal you can, and that
owning the home helps you to accomplish your financial goals.
Most people should eventually buy homes, but not everyone
and not at every point in their lives. To decide whether now's
the time for you to buy a house, consider the advantages of
buying and whether they apply to you.

 

 

Owning should be less expensive than renting
Here's a guideline that may change the way you view your
seemingly cheap monthly rent. In order for you to see how
expensive a home you could afford to buy while having the
same approximate monthly cost as your current rent, simply
do the following calculation:

Take your monthly rent, multiply by 200 =
purchase price of home

Example: $ 750 x 200 = $150,000

So, in the preceding example, if you were paying rent
of $750 per month, you would pay approximately the
same amount per month to own a $150,000 home
(factoring in tax savings). Now your monthly rent doesn't
sound quite so cheap compared to the cost of buying a
home, does it?

Even more important than the cost today of buying
versus renting, what about the cost in the future? As a
renter, your rent is fully exposed to increases in the cost
of living, also known as inflation. A reasonable expectation
for annual increases in your rent is 4 percent per year.

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