Most young adults use a calculator to figure out their financial snapshot......to rent or to buy! Calculators aren't always the best method to help them make their decision. Renting means paying the mortgage loan for the owner of the property and collecting receipts. Buying means you have many more choices and
benefits that can start building a financial portfolio early in your working career.
Renting offers no tax benefits. Owning your own residence offers tax benefits by way of tax deductions for property taxes and interest on the mortgage loan. The
deductions you receive annually for property taxes and interest paid on the
mortgage loan are enough to make the buying choice better. No calculator will tell you that.
Calculators can't take into consideration future home values. Rents are raising rapidly at 5% annually while home prices increased at a rate of .02% in the same period. Renting today can be a good deal, but could soon turn into a bad dea.
Time in your home is easy to calculate in your decision making process. If you are planning to stay in one place for at least 5 years, you are better off buying a home. The recent housing recession has changed that rule of thumb for some market places to be two years instead of five years, either way length of time in a home should be figued into your calculations.
Homeownership offers many non-financial benefits that are impossible to calculate. Homeowners have the freedom to do most anything to their home and will never need to move because of the wishes of their landlord.
Keller Williams, Greater Cleveland ~ Carol Murphy Team