I am indeed referring to renting versus owning a home with this article. All areas will differ to a degree so I am focused on the Metro Phoenix area since that’s where I live and work.
I run into a lot of people, both young and not so young that rent when they’re fully capable of owning and I just don’t understand why. There are some exceptions like if someone is moving out of state very soon then it doesn’t always make sense to make a purchase. However, most of the time there are countless benefits to buying as opposed to renewing that lease.
Face it, each month you’re going to be paying a mortgage so it really just matters whether it’s your own or someone else’s. When you rent, you pay a certain amount of dollars and what does it get you? Really, just a roof over your head for another 30-days. When you pay that same amount toward your own mortgage, it gives you stability, tax deductions, equity potential, pride, etc.
Here are some of the deductions you can take off your taxes year end:
- Mortgage Interest
- Homeowner’s Insurance
- Mortgage Insurance (most of the time)
- Property Taxes
- Repairs & Maintenance
With interest rates currently still hovering about 4%, it’s often less expensive or no more than to own than it is to rent. Our local rental market has seen skyrocketing prices over the past couple years. For example, a rental property I personally own rents for $970 per month and if someone bought it with FHA Financing, then they’re payment would be right about $925. That includes property taxes, homeowner’s insurance, mortgage insurance, principal, and interest. Now, there are not many homes available in that price that are decent, but the same can apply as prices increase too.
For a family, the stability and fact of knowing where you’re going to potentially live in another year or two or three can be priceless. Nobody likes to move every year, but with renting, you never know the landlord’s intentions and their plans of course change sometimes. Keeping your kids in the same school has a significant advantage too.
Don’t forget equity… in a growing market, like ours, where the foreseeable future looks promising to see sustainable long-term growth, equity can really be built over time. domain data This can then be used to purchase the next “forever” home or many other things.
It never hurts to know your options so if you or someone you know has been contemplating a move, I would love to assist. Call me @ 623-203-2264 to set up a free and no obligation “Pre-Move Consultation”.