Buying vs Renting | The Financial Benefits

Buying your first home is a big step and there are many benefits to buying over renting, with the top renter disadvantages being:

You have few tax incentives.
You have no control over rental amounts and terms changing.
Your rent money goes toward paying off your landlord’s mortgage and building their equity instead of going towards building equity of your own.
You are often restricted on making any changes to the dwelling.
Stricter pet restrictions.

One of the main things that buyers who are on the fence might want to know is what are the monetary advantages of buying over renting? The table below shows the average savings a homeowner can expect over 5 years when purchasing a 3BR home vs renting the same home. (***Does not include homeowner’s or renter’s insurance costs, or tax savings from deducting mortgage interest when owning a home).

COSTS	RENT	PURCHASE
Purchase Price of Home		$250,000
Down Payment (3.5% with FHA Loan)		$8,750
Estimated Monthly Payment (based on 3.5% interest rate, 4.5 APR)	$1,800	$1,102
Yearly Property Tax Rate (Based on a 1.3% rate for Palm Beach County with the $50,000 homestead exemption)		$2,600
Total Payments (over 5 years)	$108,000	$87,870

Over 5 years, the homeowner in this scenario would have saved $20,130. The value of the home would also rise due to appreciation. If the homeowner were to sell the home after 5 years at the current average rate of appreciation, they could sell the home for around $330,000, making close to $100,000 in profit. A renter would not have this benefit.

See WPB Condos for Sale | See Jupiter Homes for Sale | See Palm Beach Gardens Homes for Sale