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Buy vs. Rent

Which is best for YOU?

 In the market we are now living in, is it the right time to buy a home? You have many options to consider and choices to make.

Most people dream of owning a home and wonder which would be best for them. Renting seems to be less threatening but do you know what is all involved with renting?  Here in Clarksville  a buyer has alot of homes to choose from when it comes to purchasing.  There are also many homes to rent.  With our Military coming back we will see the rentals available diminish, which is great for the home owners but it will not be great for those who would rather rent without the knowledge of what the difference really is.  The fear for some is the big “A” word. Loan APPROVAL. What renters might not know is that Rental agencies in Clarksville require pre-approval and the credit score you need is the same as being qualified to purchase a home.  So, if you are planning on being in Clarksville more than 2 years, it would be a good idea to purchase and receive all the perks of being a home owner.

Buy vs. Rent: Pros and Cons

Buy vs. Rent: Cost Comparison

The Chart below shows a cost comparison between a renter and a homeowner over a 7 year period. The renter starts out paying $800 a month with annual increases of 5%.

The homeowner purchases a home for $110,000 and pays a monthly payment of $1,000.  After 6 years, the homeowners payment is lower than the renters monthly payment.  With tax savings of home ownership, the homeowners payment is less than the rental payment after 3 years.

One of the advantages of renting is being free from maintenance problems but you would be depending on someone else getting to you to fix their home on their time schedule, unless the rental agreement states a time in which all problems will be fixed by. Also, the flexibility of being able to move almost immediately when you decide, but there will more than likely be fees to early termination. By renting, you lose the chance to build equity, take advantage of tax benefits, and protect yourself against rent increases.  Also, you might not be free to decorate without permission and be a the mercy of the landlord for your rental needs.

There are many considerations in choosing between renting and buying:

• Do you want to spend several years in a home and neighborhood?
• Do you enjoy lawn and garden work?
• Might you need to move suddenly to care for family?
• Do you want to keep your assets accessible in the bank, or do you want to invest long-term in a home?

There are tax advantages to home-ownership in both the short and long terms. The mortgage interest and real estate taxes are tax deductible, which allows you to subtract part of your housing-related expenses from your taxable income, which could reduce your tax bill. In many cases, the amount of money a renter spends on rent can be about the same as or less than the amount a homeowner spends on a mortgage. With the tax benefit for homeowners, the savings can be significant.

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