Renting_vs._Buying

Toshiba | Renting VS. Buying | | Rebecca 11/8/2010 | The topic being discussed in this paper is renting vs. buying a home. This discussion will present examples of the amount of money it costs to rent, to buy, and the difference between the two. Which costs more and which cost less, as well as which is the better deal. My personal opinion is that buying is the best choice financially. In the city of Flint the average monthly payment for rent on a one bedroom apartment is $510.00. For a two bedroom $692.00 and a three bedroom is $966.00. For this example if you were to rent a 1 bedroom apartment, comparing that to the thirty years you usually would spend to pay for a loan on a home that comes to $183,600.00. In Flint the average price on a home is $56,702. With good credit, taking a loan out for only the amount of the home considering an interest rate of 5% over thirty years, property taxes at 1.5% and a PMI of .5%, you will pay $363.45 a month. Altogether after the 30 years or 360 months that would be used to pay for the loan the end amount totals to $130,843.14. That being said, the apartment will cost you $52,757.00 more in the end. After all is all said and done you would not actually own the apartment where as the home would be yours. It would seem more logical to own then to rent. That is $53,000 basically wasted that could be put to use buying a car, groceries, etc. When a person rents an apartment they do have the luxury of being able to call their land lord or maintenance person to fix household problems such as plumbing, gas leaks, light fixtures, etc. You may have to wait on them to fix the problem but it does not ending up costing you your money. When you own your own home, you have to spend your own money to do repairs. If you can’t fix that particular problem, extra money may be needed for a repair man. Renting also requires you to approve any alterations done such as painting, or additions, while buying allows you to do whatever you’d like to your home without restriction. Over all buying is a better way to go in the long run. The money for the payments every month allow you to end up owning the home instead of wasting money on renting something that will never be yours. You can do any alterations to the home without having to get it approved. And in most cases if you do basic alterations to the home to do simple upgrades keeping it up to date the home can be sold later for more than you bought it for. It’s an all around better investment of your money. Flint, Michigan Real Estate Market. (2010). Retrieved from http://realestate.aol.com/Flint-MI-real-estate Average Rent for Flint. (2010). Retrieved from http://www.rentvine.com/tools/averagerent/'cs=334 Mortgage calculator . (2007-2010). Retrieved from http://www.mortgagecalculator.org/ Information used: Home Value: | $ | Credit profile: | | Loan amount: | $ | Loan Purpose: | | Interest rate: | % | Loan term: | years | Start date: | | Property tax: | % | PMI: | % | | Output parameters » | | Draw charts | | Monthly vs bi-weekly payments | | Show annual amortization table | | Show monthly amortization table | | | | Mortgage Repayment Summary | $363.45Monthly Payment | | $130,843.14Total of 360 Payments | | | | $49,901.04Total Interest Paid | | Oct, 2040Pay-off Date | | | | $21,263.25Total Tax Paid | | $2,976.86Total PMI Paid | | | | Monthly PMI126 Monthly PMI Payments of $23.63 Each | | May, 2021PMI Pay-off Date   | | | | Monthly vs Bi-weekly Payment | $363.45Monthly Payment | | $181.73Bi-weekly Payment | | | | Oct, 2040Monthly Pay-off Date | | Jan, 2036Bi-weekly Pay-off Date | | | | $49,901.04Total Interest Paid | | $40,160.60Total Interest Paid | | | | Total Interest Savings: $9,740.44 | | Bottom of Form