We’ve recently been hearing quite a few people extolling the benefits of renting over buying your home. It does seem a little odd that we have seen home mortgage interest rates at amazing lows, and yet only 64.5 % of the American public has elected to own their own homes, according to the U.S. Census Bureau.
So we have re-opened an investigation the age-old phenomenon of renting vs. owning a home. We are depressed to know that “home ownership in the U.S. is at its lowest level since 2004, when 69% of Americans owned homes.” Following the lead of the Wall Street Journal, we took our investigation in three directions: “taxes, costs, and quality of life.”
About Your Tax Benefits
When mortgage interest rates rolled at about 8%, there was a consolation: A nice, fat mortgage interest tax deduction! You could also add the deduction for property taxes, and you’d fatten up your tax rebate even more.
With today’s interest rates hovering at 3.46%, you can imagine the math, and know that you are not going to save very much money on your taxes.
We estimate only 300.00 to 1,000.00 return in the current tax system. (This does give us pause to think, but read the remainder of our little investigation before you sign a rental lease!)
About Your Costs Per Month
We turn to our second direction: Monthly Costs.
When you decide to rent or own, you will undoubtedly consider the difference renting or owning will make in your monthly budget. We again refer to the Wall Street Journal’s research, and utilize their example:
“Since the median U.S. housing price is a close match with prices in Phoenix, let’s use Phoenix as an example. According to the Department of Housing and Urban Development, the average cost to rent a three bedroom home in Phoenix is $1,363.”
On the other hand, you can own a home for about $700 per month, using a good mortgage company like Palm State Mortgage Company. Let’s see…that makes renting cost twice as much as owning.
About Your Quality of Life
In the above mentioned high dollar apartment…
You will have no yard for the kids.
You will pay a handsome pet deposit for that Labrador Retriever and the family cat.
The neighbors are the quiet type, but their television still thumps through your walls.
Remember that any special adaptations you want to make to the property will require the landlord’s permission:
No, it is doubtful you can add that chandelier, paint that wall mural, or add on a room. You will have no choice in landscaping, and you will just have to live with the thorn bushes on each side of the front walkway. For all this inconvenience, you get the privilege of paying twice the monthly budget that you would if a company like Palm State Mortgage had arranged a loan for you.
In this recovering economy, you can still see the old American Dream of a sweet house in a nice neighborhood, but dreams like pride in ownership and independence must be possessed; they can not rented.