Owning versus Renting
OWNING v.s. RENTING
Several hundred thousand reasons why owning is better than renting for years.
Your TOTAL RENT Payments, including an annual 5% rent increase. |
||||
Monthly Rent |
5 Year Total |
10 Years |
20 Years |
30 Years |
$800 |
$53,040 |
$120,744 |
$317,316 |
$637,416 |
$1,000 |
$66,324 |
$151,020 |
$397,236 |
$798,012 |
$1,200 |
$79,569 |
$181,122 |
$476,150 |
$956,719 |
$1,400 |
$92,831 |
$211,309 |
$555,508 |
$1,116,173 |
$1,600 |
$106,092 |
$241,496 |
$634,866 |
$1,275,626 |
… this provides NOTHING but basic shelter.
With the benefits of ownership you will find financial and tax advantages of your own:
- Deducting mortgage interest improves your income taxes and your take-home pay.
- The property tax deduction improves your income taxes and your take-home pay.
- Building of equity and value FOR YOU, instead of paying for someone else’s future.
- Ability to access equity through refinancing or sale.
- You can pass the property onto your heirs or transfer it into a trust.
- Pride of ownership will be your password, instead of being a “tenant”.
- Ability to customize, to decorate, and make your home fit your lifestyle.
- No more Landlord!
- Owning a home improves your credibility and personal standing.
Now this is not a promise, but past history shows that if you hold onto your property for years – you will build equity. Here is a simple example: if you purchase a $275,000 home and it improves in value only 2% per year, in twenty years it would be worth $408,635. With no new debt you would have retired $123,500 from your loan by making the normal payments to principal and interest. If these calculations were all exact; $257,135 would belong to you if you sold the property after paying off the remaining note balance of $151,500. Considering that you may have only put a 3% down payment to begin with, that is a phenomenal return on your investment. The average California home in the 1950’s was worth about $24,000 and look at them now. What will things be worth in the distant future? Your guess is as good as ours.