Renting vs. Buying a Home

By: Raevyn Jones, Marketing Coordinator, NHS of Baltimore

One of the biggest financial debates of all time is arguably the topic of renting vs. buying a home, which one is better? As June is National Homeownership Month, many columnists are putting out articles maintaining that it is more advantageous to be a buyer instead of a renting.

A huge misconception is that the amount of money a renter spends on rent can be about the same as or less than the amount a homeowner spends on mortgage. However, what people fail to realize is that when it comes to renting vs. buying, the tax incentives for homeowners can save them a significant amount of money. For example, a renter may start out paying $800 per month with annual increases of 5%, a homeowner on the other hand can purchase a home for $110,000 and pay a monthly mortgage of $1,000. With the tax savings of homeownership, after six years the homeowner’s payment will be lower than the monthly payment of a renter.

Other advantages to homeownership are that it builds stability, people are free to change décor and landscaping, and you do not have to depend on other people to maintain the property. The only advantages to renting as oppose to homeownership is that it is much easier to move and there is little or no responsibility when it comes to maintenance.

Before people make the decision of whether to rent or own a home, they should utilize their resources and find out which is better for them. Talking to a homeownership advisor or simply taking a financial literacy course can help you figure whether you should become a homeowner and if your finances will allow you too.

In the meantime, many people who have accomplished the dream of homeownership are celebrating, as June is national homeownership month. Homeowners can visit the HUD website to find local homeownership events in their area.