Rent or Buy?


Homes-for-rent-in-Spring-TexasThe first step is to understand the arguments in favor of buying and renting. To calculate whether buying or renting makes more sense financially, you need to have a sense of your monthly costs in each case, including rent, mortgage payments, taxes, insurance and other related expenses that may apply to each option—as well as whether you would be more likely to spend or invest any savings from renting.

Many people see buying a home as an essential step in a successful life, and owning one can bring significant financial benefits. The most obvious upside is that a home can significantly increase in value. The potential payoff can loom large in a buyer’s mind when home prices are going up rapidly, as they have recently. Many homeowners also can deduct mortgage interest from their income-tax bills along the way. Buyers, of course, can build up equity as they pay down a mortgage, which can compensate for higher monthly costs.

Rent is never owned, it is rented and rent is

due every day!..

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Whether buying a house makes more financial sense than renting a home, prospective homebuyers might want to consider using a mortgage calculator to assess the financial wisdom of making a home purchase given their current circumstances. The Home Scouting Mobile app rent vs. buy calculator can help you calculate the net cost of buying a home versus the cost of renting over time or click the image to sign up.



Buying becomes cheaper after 6 years. Here is what you need to know to help figure out the most cost-effective way to keep a roof over your head. Net costs compare the total amount of money you would be spending over time, minus the potential value you might receive if you someday sell the property and how it compares if you were instead paying rent. From the chart, you’ll see that the amount of time you plan on keeping the home has a major impact. After 6 years, the homeowner’s payment is lower than the renter’s monthly payment. With the tax savings of home ownership, the homeowner’s payment is less than the rental payment after 3 years. For example, the charts below taken from that are relatively close, can show you approximate costs brake down.

Buying cheaper than Rent after 6 yrs graph

The median sales price of existing single-family homes rose 81% from 1993 through 2013, according to the NAR.

Total Costs Year 1-6

Rent vs Buy Costs Year 6


On the surface level, buying real estate property tends to make financial sense. Federally insured home loans allow consumers to take out mortgages at extremely low rates, resulting in a lower overall cost over the life of the loan. And because most real estate appreciates over the long run, buying a home is often viewed as a strong investment.

But timing matters when you’re looking to save money and get back a strong return. Inflated home prices can present poor investment opportunities, and mortgage APR increases of mere fractions of a percent point can cost tens of thousands of dollars over the life of the loan. Buyers also need to maintain some confidence that they will be sticking around for the long run: Due to the high closing costs and other expenses that go into a home purchase, it takes years before the purchase starts to pay off in the form of savings.

In addition, homeowners can tap into the equity in their homes for big-ticket expenses, such as college tuition, at interest rates that can be lower than other financing options—though that can backfire by saddling homeowners with debt they can’t easily repay.

Homeowners don’t have to worry about a spike in rents.

In short, buyers need capital to cover the down payment and closing costs, confidence in how the home’s value will change over time, and time to let their investment pay dividends.

Still, owning a home can be well worth it for personal and psychological reasons that go beyond financial calculations.

Other Key Considerations. Buying a house isn’t all about economics. Whether you’re an individual or a family — or whether you have kids or not — lifestyle is an important consideration. Families looking to buy a home need to consider the relative safety of a neighborhood, their proximity to local schools and the quality of the school district, and other community features like public parks and recreation programs.


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