1) No Maintenance Costs or Repair Bills
One of the benefits of renting a home is that there are no maintenance costs or repair bills. When you rent a property, your landlord is responsible for all maintenance, improvement, and repairs.
Unless you plan to be there for 5 years or more, renting probably makes more sense. There are a lot of costs associated with buying and selling homes, and in order to offset those costs you'll need to stay in the home for a while. Many experts believe that 5 years is generally the tipping point.
In many cases, renting can be cheaper than buying a home because of the upfront costs involved. This includes a down payment, closing costs, moving costs, any renovations and other home maintenance tasks. That said, just because you can afford a mortgage payment doesn't mean you can afford a home; expenses add up.
Renting: You pay less up front. ... Owning: Most mortgages require a down payment, and you generally get better terms with more money down. You may also need to pay closing costs. You can usually customize or update your home with renovations (some of which may boost your home's value).
The answer is no. Renting is not a waste of money. The argument against renting is that you're not putting your money toward a great investment: your home.
The rent-to-own setup is vulnerable to scams and shady landlords. As the tenant, you take on most of the risk in a rent-to-own contract. You're the one paying more than necessary in rent each month with the promise that the owner will credit the amount toward the purchase price someday.
Back to the debunking the “rent is forever; your mortgage is not” argument: Yes, your P&I payments will disappear after 15-30 years. ... You'll never be finished with home payments. Regardless of whether you rent or own, you'll spend your life paying for housing in one form or another.
In general, it's best to buy when you have your eye on the horizon and you're thinking long-term. Experts largely agree that you shouldn't own unless you plan on staying in the home for at least five years. That's because, thanks to their high start-up costs, houses don't usually make great short-term investments.
Most articles and financial experts recommend the “30% rule,” spending 30% of your gross monthly income (before taxes) on your monthly rent. That means, if your income is $4,000 per month (or a $48,000 annual salary), then you should be paying $4,000 x 0.3, or about $1,200, on rent monthly.
The short answer is: Your rent payment should total no more than 25% of your take-home pay. That's the magic number. As mentioned above, your monthly rent should be no more than 25% of your take-home pay.
Downsides of Buying a Condo
Fast-rising home prices and higher mortgage rates have made it cheaper to rent a home than buy and own one. ... Renting and reinvesting the savings from renting, on average, will outperform owning and building home equity, in terms of wealth creation.
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