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Own vs. Rent Benefits |
The chart below shows a cost comparison for a renter and a homeowner over a seven year period.
- The renter starts out paying $800 per month with annual increases of 5%
- The homeowner purchases a home for $110,000 and pays a monthly mortgage of $1,000
- After 6 years, the homeowner's payment is lower than the renter's monthly payment
- With the tax savings of homeownership, the homeowner's payment is less than the rental payment after 3 years
|
Years |
Rent
Payment |
Mortgage Payment |
Monthly Difference |
After Tax Savings |
Yearly Difference |
After Tax Savings |
1 |
800 |
1000 |
-200 |
-50 |
-2400 |
-600 |
2 |
840 |
1000 |
-160 |
-10 |
-1920 |
-120 |
3 |
882 |
1000 |
-118 |
+32 |
-1416 |
+384 |
4 |
926 |
1000 |
-74 |
+76 |
-888 |
+912 |
5 |
972 |
1000 |
-28 |
+122 |
-336 |
+1464 |
6 |
1021 |
1000 |
+21 |
+171 |
+252 |
+2052 |
7 |
1072 |
1000 |
+72 |
+222 |
+864 |
+2664 |
8-30 |
|
|
Savings increase every year |
|
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Own vs. Rent Comparison Chart |
Own |
Advantages |
Considerations |
| Property builds equity |
Responsible for maintenance |
| Sense of community, stability, and security |
Responsible for property taxes |
| Free to change decor and landscaping |
Less mobility than renting |
| Not dependent on landlord to maintain property |
|
Rent |
Advantages |
Considerations |
| Little or no responsibility for maintenance |
No tax benefits |
| Easier to move |
No equity is built up |
| |
No control over rent increases |
| Possibility of eviction |
|
|
|
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