The great debate: Rent vs Buy a HomeYou may be wondering is buying right for you. Here is a comparison chart that may help you consider both sides.
Renting vs Buying a Home In the News:August 8, 2016 -Trulia's latest Rent vs. Buy Report explained that homeownership remains cheaper than renting with a traditional 30-year fixed rate mortgage in the 100 largest metro areas in the United States.
January 25, 2016 - Buy or rent? Zillow CEO shares real estate tips
September 22, 2015 -According to the latest Beracha, Hardin & Johnson Buy vs. Rent (BH&J) Index, home ownership is a better way to produce wealth, on average, than renting.
View a Buying vs Renting Calculator from Realtor.org (Assuming you will not have a roommate renting from you.)
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What a home to be an investment?To ensure you purchase the best real estate, you need to know what qualities make for a good investment property.Related: Where to Buy Real Estate for Higher Value...
Effective After Tax Rate.
This is important for helping people fully understand the huge value of home ownership.
Let’s use a calculation of an average appreciation of a home at 4.5%
If the client has a mortgage of 3% and is in a 24% Income Tax Bracket: Take 100-24 (24 being the Income tax bracket) = 76.
76 x .003 = 2.28. The Effective after tax rate is then 2.28%.
Deeper drill down of this example: If I own a $400,000 valued home and it is appreciating at 4.5%, then next year it would be valued at $418,000.
4.5 - 2.28 = 2.22 If we then take the $400,000 x 2.22% it is a $8,880 net gain. That is a gain of $740 per month!
Of course there are other costs associated with owning a home like property taxes & insurance but we all need shelter! Also keep in mind that while one is making a payment, the principal balance is going down and there is additional equity gained.
Bottom line is that homeownership is a great way to build wealth and there are many studies that can show that.