Should I Rent or Buy A New Home | Maple Street Homes | New Homes in Cincinnati, Northern Kentucky, and Indiana

Should I Rent or Buy?

For most people, the question of renting or buying is more about when. It's not if you should buy, it is just a matter of when. Renting or purchasing is actually more straightforward than what you may think. You can either pay the landlord, or you can pay yourself. Interest rates and affordability reflect unprecedented opportunity in today's market. In fact, there may never be another buyer's market as good as today's.

Paying rent looks more affordable in the short term. Monthly layout appears to be at least equal to or a little less than making a mortgage payment. However, a closer look reveals that renting is costly. It may offer some convenience, but it is money that is gone forever. Through your monthly rent, the landlord builds wealth equity.

Investing in a home is the path to paying yourself. When you make your monthly payment, there are several incredibly wonderful things that happen. Pride of ownership is stimulated, new tax deductions are available, a leveraged return happens for you, and your own personal equity wealth building occurs. Over time, the path of owning usually is far better than renting.

WHAT YOU CAN PAY YOURSELF
Present Value	After 1 Year	After 2 Years	After 3 Years	After 4 Years	After 5 Years	Total Appreciation
$140,000	$145,600	$151,424	$157,481	$163,780	$170,331	$30,331
$150,000	$156,000	$162,240	$168,730	$175,479	$182,498	$32,498
$160,000	$166,400	$173,056	$179,978	$187,177	$194,664	$34,664
$170,000	$176,800	$183,972	$191,227	$198,876	$206,831	$36,831
$180,000	$187,200	$194,688	$202,476	$210,575	$218,998	$38,998
$190,000	$197,600	$205,504	$213,724	$222,273	$231,164	$41,164
$200,000	$208,000	$216,320	$224,973	$233,972	$243,331	$43,331

WHAT YOU WILL PAY YOUR LANDLORD
Rent at Present	Rent After 1 Year	Rent After 2 Years	Rent After 3 Years	Rent After 4 Years	Rent After 5 Years	Total Rent Paid
$650	$676	$703	$731	$760	$791	$51,737
$700	$728	$757	$787	$819	$852	$55,717
$750	$780	$811	$844	$877	$912	$59,697
$800	$832	$865	$900	$936	$973	$63,677
$850	$884	$919	$956	$994	$1,034	$67,656
$900	$936	$973	$1,012	$1,053	$1,095	$71,636

*Both examples assume 4% annual cost increase on rent, and equity from ownership appreciation. For more info on building wealth through home ownership see a Maple Street Home Sales Counselor.

Tax Savings in Your First Year of Home Ownership

Based upon your income and the amount you borrow when buying a home, your federal income tax owed is reduced. These savings are only available to Homeowners. Find your savings in the chart below based upon your current situation.

TAX SAVINGS IN YOUR FIRST YEAR OF HOME OWNERSHIP
Mortgage Amount	Borrowers Income
Mortgage Amount	$30,000	$40,000	$50,000	$60,000	$70,000	$80,000
$120,000	$1,725	$1,725	$1,725	$1,725	$1,725	$1,725
$130,000	$1,869	$1,869	$1,869	$1,869	$1,869	$1,869
$140,000	$2,013	$2,013	$2,013	$2,013	$2,013	$2,013
$150,000	$2,156	$2,156	$2,156	$2,156	$2,156	$2,156
$160,000	$2,300	$2,300	$2,300	$2,300	$2,300	$2,300
$170,000	$2,444	$2,444	$2,444	$2,444	$2,444	$2,444
$180,000	$2,588	$2,588	$2,588	$2,588	$2,588	$2,588

*25% Tax Bracket, 5.75%. Based upon your income and the amount you borrow when buying a home, your federal income tax owed is reduced. These savings are only available to Homeowners. Find your savings in the chart above based upon your current situation. This table shows typical reduction in federal income tax that a home owner would receive in the first year of home ownership due to mortgage interest and real estate taxes being deductable. Most states follow the federal tax calculation, and home owners would also see a reduction in their state income tax, but the state savings is not included in this table. Source: NAHB