Why buy a house over renting a house, when it is cheaper to rent. I have heard this year after year, This article will go over a reason to buy.
Why buy a house over renting a house, when it is cheaper to rent.
I have heard this year after year, why buy a house when I can rent it and not have to worry about maintenance, taxes and insurance.
It is cheaper to rent than buy.
I can go where I want and rent where I want and not have to worry about selling a house.
All sounds, like good reason to rent.
And with prices being as high as they are, maybe you have to rent.
Why Buy a House Over Renting a House
Now, let’s look back, lets say 10 years, back then in many cities in Southern California you could have rented a nice 3 bedroom – two bath home for around $1800 and in many cities, houses were selling around $200 to $350 thousand dollars.
Even then, you would hear it cheaper to rent than buy, and you don’t have to worry about maintenance.
Today in many cities the rent for the same house would be around 3 to 4 thousand per month and the same would possibly sell for around $700 to $900 thousand.
If you had bought a 3 bedroom 2 baths a house for $350 thousand dollars back then at 7% your payment with taxes and insurance would have been around $2000 per month with 20% down.
Yes, up front, it’s going to be cheaper to rent and if you are not worried about the future, and with many rentals, you will not have to worry about maintenance, but don’t count on social security as being part of your retirement, that is if you plan to retire some day.
Today if you wanted to buy a nice 3 bedroom – 2 bath house it may cost you $700 thousand or more
If you were to buy a 700 thousand dollar house today, with 20% down at 7% the payment for a 30-year mortgage would be with taxes and insurance around $4700 per month.
Oh, by the way, the interest you pay on the mortgage loan is tax-deductible.
You also would have built equity of around $350 to $550,000 thousand dollars
So, if you need to rent to save the money to buy, do it.
If you need to live with your parents, if they let you, to save money to buy, then do it.
Call or text (909) 226-3551 to set an appointment or to ask a real estate question
As I have said, you need to save to buy your own home and that means giving up a few things like eating out, buying a new car, partying and so on.
And like I have said in many of my past articles, the first house, condo or townhouse you buy is not going to be your dream house.
The numbers I am using are for general information only and the price of houses for sale, houses that have sold for in the past and the cost for monthly rents are may be different depending on your area or the areas you are looking at.
This is your Realtor
Steve Olmos Selling real estate in Southern California since 1980
Leave a Reply