11/12/2020
True Rent vs. Buy Cost | Marc Menowitz | Real Estate Investment
a True Rent vs. Buy Cost by marcmenowitz | Oct 5, 2020 | Blog, Marc Menowitz
When people start thinking about buying a home, one of their first questions is often, “is renting or buying a house cheaper?” There are several factors that go into this calculation. Understanding how the true cost of renting vs buying works will help people make the right choice for their family.
The True Costs Associated With Buying a Home True costs cannot be calculated just by looking at the cost of a mortgage versus the cost of a rent payment. Buying a home often includes a lot of factors that result in higher payments than realized. First of all, there are all the closing fees involved with purchasing a home, which can result in thousands of extra dollars. Then homeowners need to pay property taxes and homeowner’s insurance, and unless they have an unusually high downpayment, they may need to pay mortgage insurance at first. Renter’s Upfront Payments Are Cheaper At First When all the costs of being a homeowner are included, it is usually cheaper to rent at first. An analysis shows that renters’ yearly costs are lower than a homeowner’s yearly costs for the first 22 years! This might
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