Rent versus ownWith rising rents and lack of available rentals, you may be wondering if you could afford to buy. Well, let me show you how it looks.

If you were to pay $1,800.00 per month in rent, for example, and the average rental payment increase was 4.000%, you would pay $116,992.57 in a 5 year period toward rent. If you purchased a home and borrowed $250,000.00 with a 4.000% interest rate, and you paid $900.00 every year toward its maintenance, you would pay $101,320.63 in a 5 year period toward mortgage payments if your Federal tax rate is 26.000%, you pay $3,000.00 in taxes each year and your annual insurance rate is $1,500.00.

When you consider your tax benefits and the appreciation of your home, however, you will actually SAVE money by purchasing a home. If your home shows an annual appreciation of 5.000% and your selling cost is 6.000%, your house appreciation value will be $382,884.47. As a result, your total home purchase benefit will amount to $154,014.56.

Now, the question becomes who do you want to benefit from your monthly payment? You? Or your landlord?