It’s not unusual for folks to think that it is cheaper to rent than it is to buy. Admittedly, it may be true in some cases. What is also true is that many renters overlook hidden costs of renting. Those hidden costs can be enough to tip the scales toward homeownership all by themselves. Were you aware of these top five hidden costs of renting?
- Equity When you rent, you are lining the landlord’s pockets and creating equity for him. When you decide it’s time to move, you have nothing to show for the time you have paid rent. When you buy a home, if you remain in the same place you will eventually own it and have no further monthly payment to make. Even if you move before you have paid off the mortgage, you have reaped other benefits during the time you owned the home. Consider also that usually a home’s value increases over time, but even in a down market when it may not increase, you can still own a home free and clear. When you are renting , you will never have a month when the landlord says, “You’ve been paying for this long enough, now you own it!”
- Income Tax Savings When you rent a home, if your income is above a certain level, you will be paying more in taxes than you would if you owned your own home. Homeowners can deduct the cost of property taxes and the interest on the mortgage. Just like your landlord is doing now.
- Storage and Security Renters often have more possessions than will fit comfortably in the home they are renting. That usually means it is necessary to rent additional storage space. The cost of the storage rental needs to be counted as part of the monthly housing payment. Another issue with these kinds of storage needs is security, especially for off-site storage. When you store all your belongings on your own property you have much better security.
- Improvement Costs Most long-term renters will at some point decide to paint, replace flooring or undertake other projects to make their home livable. Unfortunately, those costs are never recouped for renters. In fact, those kind of improvements only serve to improve your landlord’s investment. In the worst case, a landlord may even require that the tenant pay to return the property to it’s original neutral decor.
- Lost deposits Anyone who has rented more than a couple apartments is aware of just how easy it is to lose your security and pet deposits. It doesn’t seem to matter how careful you are, the landlord pretty much has the final say.
If you are considering buying your home, consider talking to Sally Lawrence. “HomeSalesSally” can help you decide if it’s the right choice for you. Call 661.375.REAL or email Sally@HomeSalesSally.com today.