Assignment 1: Renting Vs. Buying
Renting vs. Buying
Composition and Communication II/ COM/156
April 09, 2011
Carrie Kendall
Why would anyone want to use their hard-earned cash to pay for a landlord’s mortgage when you could be using the rent money to buy a home of your own? (Hang) “People who are looking to buy their first homes typically keep renting during slow real estate markets in hopes that purchase prices will drop, and the current market is no exception.” (Tedeschi) In today’s market we see the prices of homes dropping to an incredible low and although it is a hard time to sell it’s a great time to buy. Some people are worried about taking on one of the largest financial responsibilities of their lives, however, “Your …show more content…
Although some people think that the better option is renting, it’s actually not the best option for the future. When renting, you pay a set amount for rent and never see that money again, but when buying you have the ability to resell and even get to claim your home on taxes. As stated above you may also receive some form of tax credit along with a general tax credit associated with buying a home. After doing some research I found that on average a “renter starts out paying $800 per month with annual increases of 5%. The homeowner purchases a home for $110,000 and pays a monthly mortgage of $1,000. After 6 years, the homeowner's payment is lower than the renter's monthly payment. With the tax savings of homeownership, the homeowner's payment is less than the rental payment after 3 years.” (Mae) When renting a home, wealth is not tied up in a single investment; however, the renters are also not accruing any form of equity. Thus meaning the money is going directly to the landlord instead of towards your own investment. When you buy a home, you start to build equity. When you are ready to move and sell your home, it will normally be worth more than you paid if you have been in the home for a few years. Buying a home early can potentially benefit future endeavors because the house could be paid off by the time one retires. As a renter you are basically handing someone money to pay their mortgage and will …show more content…
Owning your own home “you can fix the place to suit your particular needs. You can also have pets in your home.”(Asch) When renting you maybe be able to have a pet but most likely will have to pay extra and the bigger the animal the more the money. Discovering the pride of having your own home can also be extremely rewarding. There are many rules and restrictions to what you can and cannot do when renting. When you own a home you can change things by installing new flooring, getting new cupboards, or even painting the walls. You can add on to your house such as adding more rooms or a garage. When renting you are only able to change things that you and your landlord agreed upon in the renting contract you signed. You must be careful not to break things or destroy any part of the house because you will not only have to pay to fix it you could lose your security check as
Composition and Communication II/ COM/156
April 09, 2011
Carrie Kendall
Why would anyone want to use their hard-earned cash to pay for a landlord’s mortgage when you could be using the rent money to buy a home of your own? (Hang) “People who are looking to buy their first homes typically keep renting during slow real estate markets in hopes that purchase prices will drop, and the current market is no exception.” (Tedeschi) In today’s market we see the prices of homes dropping to an incredible low and although it is a hard time to sell it’s a great time to buy. Some people are worried about taking on one of the largest financial responsibilities of their lives, however, “Your …show more content…
Although some people think that the better option is renting, it’s actually not the best option for the future. When renting, you pay a set amount for rent and never see that money again, but when buying you have the ability to resell and even get to claim your home on taxes. As stated above you may also receive some form of tax credit along with a general tax credit associated with buying a home. After doing some research I found that on average a “renter starts out paying $800 per month with annual increases of 5%. The homeowner purchases a home for $110,000 and pays a monthly mortgage of $1,000. After 6 years, the homeowner's payment is lower than the renter's monthly payment. With the tax savings of homeownership, the homeowner's payment is less than the rental payment after 3 years.” (Mae) When renting a home, wealth is not tied up in a single investment; however, the renters are also not accruing any form of equity. Thus meaning the money is going directly to the landlord instead of towards your own investment. When you buy a home, you start to build equity. When you are ready to move and sell your home, it will normally be worth more than you paid if you have been in the home for a few years. Buying a home early can potentially benefit future endeavors because the house could be paid off by the time one retires. As a renter you are basically handing someone money to pay their mortgage and will …show more content…
Owning your own home “you can fix the place to suit your particular needs. You can also have pets in your home.”(Asch) When renting you maybe be able to have a pet but most likely will have to pay extra and the bigger the animal the more the money. Discovering the pride of having your own home can also be extremely rewarding. There are many rules and restrictions to what you can and cannot do when renting. When you own a home you can change things by installing new flooring, getting new cupboards, or even painting the walls. You can add on to your house such as adding more rooms or a garage. When renting you are only able to change things that you and your landlord agreed upon in the renting contract you signed. You must be careful not to break things or destroy any part of the house because you will not only have to pay to fix it you could lose your security check as