1962 Evelyn Byrd Avenue
Harrisonburg, VA 22801
homes@realestatethatsells.com
Harrisonburg, VA 22801
homes@realestatethatsells.com
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Own vs. Rent
Everyone wants a roof over their head. There are several options to accomplish this - buy a house
or condo, rent a house or apartment, buy into a cooperative, or sponge off friends or family.
Typically the decision boils down to "own or rent". In most cases, one finds that the best option is
to own. This page provides some considerations that may help you make an informed decision.
or condo, rent a house or apartment, buy into a cooperative, or sponge off friends or family.
Typically the decision boils down to "own or rent". In most cases, one finds that the best option is
to own. This page provides some considerations that may help you make an informed decision.
10. Buy while my credit report is in excellent shape.
9. Buy while my job is secure.
8. A inflation protected investment.
7. Tax deductions.
6. Annual savings from not paying rent on equivalent living quarters.
5. Can be used for rental property for an income flow.
4. Have something you can borrow money against, if necessary, via a Home Equity Loan.
3. Something you can sell. You will have equity - an amount convertible to cash in the future.
2. Pride of ownership.
1. Empowerment and independence by owning your own 'space'.
9. Buy while my job is secure.
8. A inflation protected investment.
7. Tax deductions.
6. Annual savings from not paying rent on equivalent living quarters.
5. Can be used for rental property for an income flow.
4. Have something you can borrow money against, if necessary, via a Home Equity Loan.
3. Something you can sell. You will have equity - an amount convertible to cash in the future.
2. Pride of ownership.
1. Empowerment and independence by owning your own 'space'.
Own vs. Rent Quiz
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1. Are you qualified to get a mortgage?
-A lender can pre-qualify you quickly (sometimes while on the phone) at no cost. A little later, they
can tell you if you are pre-approved. (Some lenders are now doing pre-approvals on the initial
phone call.)
2. Is there a high probability that you will stay in the home about 5 years or that if you
move, your employer will cover the expenses?
-Typically it takes about 5 years to break even considering the expenses to buy and sell a home.
3. Does the price of homes in the area typically increase annually enough to exceed the
rate of inflation?
-Some areas may be decreasing in value or have good probabilities of significant decreases in
market value and lead to a loss of your equity in a home.
4. Are your current itemized tax deductions without home ownership deductions close to
or exceed the standard deduction on your Federal taxes?
-A major plus for buying over renting is the capability to recoup some of the property taxes and
the interest paid on your mortgage through tax deductions.
5. Are the annual costs of rentals that satisfy your needs more than the annual costs of
buying a home?
-If the annual cost of renting is less than the annual cost of owning a home (including additional
deductions for property taxes, income taxes, and appreciation), you may be better off renting and
investing your money elsewhere. (See Example)
If you answered yes to all the above questions, it is highly probable that buying is the
best decision.
If the answer to number 1 is no, you should inquire as to why and work on correcting
the problem if possible.
If any answer to numbers 2 through 5 is no, consider whether you should buy, however,
you may have personal goals or considerations that out way monetary considerations.
-A lender can pre-qualify you quickly (sometimes while on the phone) at no cost. A little later, they
can tell you if you are pre-approved. (Some lenders are now doing pre-approvals on the initial
phone call.)
2. Is there a high probability that you will stay in the home about 5 years or that if you
move, your employer will cover the expenses?
-Typically it takes about 5 years to break even considering the expenses to buy and sell a home.
3. Does the price of homes in the area typically increase annually enough to exceed the
rate of inflation?
-Some areas may be decreasing in value or have good probabilities of significant decreases in
market value and lead to a loss of your equity in a home.
4. Are your current itemized tax deductions without home ownership deductions close to
or exceed the standard deduction on your Federal taxes?
-A major plus for buying over renting is the capability to recoup some of the property taxes and
the interest paid on your mortgage through tax deductions.
5. Are the annual costs of rentals that satisfy your needs more than the annual costs of
buying a home?
-If the annual cost of renting is less than the annual cost of owning a home (including additional
deductions for property taxes, income taxes, and appreciation), you may be better off renting and
investing your money elsewhere. (See Example)
If you answered yes to all the above questions, it is highly probable that buying is the
best decision.
If the answer to number 1 is no, you should inquire as to why and work on correcting
the problem if possible.
If any answer to numbers 2 through 5 is no, consider whether you should buy, however,
you may have personal goals or considerations that out way monetary considerations.
Own vs. Rent Calculator
Use this calculator to determine which makes the most economic sense for you. To use the
calculator, click here (courtesy of Wells Fargo Home Mortgage).
calculator, click here (courtesy of Wells Fargo Home Mortgage).
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Ten Top Reasons to Own
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