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Renting vs. Buying: What Does it Really Cost? [INFOGRAPHIC]

Renting vs. Buying: What Does it Really Cost? [INFOGRAPHIC] | Keeping Current Matterss

Some Highlights:

  • The percentage of income needed to afford a median priced home is almost half the percentage of income needed to afford median rent.
  • Buying costs are significantly less than renting costs.
  • The percentage of income needed to afford a median priced home is less than the historic norm.

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10 replies
  1. Phil Herzog
    Phil Herzog says:

    What would you say about a person who is retired and/or unemployed and only receiving SS and also has a FICO score under 700. Now this person has enough $ to pay cash for a house but if he were to rent and invest the most of his $ and could pay the rent from the growth of the investment alone, and in the end still have the $ he always had, with no realestate tax, no upkeep, no maintenance, etc. Then, tell me again why this person would want to buy rather than rent and be free to come and go and not worry about his home, or could move almost anytime at all, just because.

    Reply
    • Niki
      Niki says:

      @Phil… when you purchase real estate, you’re building equity. If the person you’re talking about were to buy, he’d be paying a mortgage payment every month out of his investment growth, and then when he gets ready to move, he more or less gets that money back, When he rents, he walks away with his furniture & clothing.

      Reply
      • Matt
        Matt says:

        1800 a month on a 180k investment is easy. 180k down on a 900k multi famil. 35k a unit for 25 units. Gross rents on 5% vacancy at 800 a month is $19,000. Let’s say your NOI is 45% and debt service is 5k a month on a 7 year balloon 30 year amm. $3,550 monthly cash flow on 24 occupied units. 23.6% ROI. Check the number and make sure I did that right.

        Reply
  2. Deb Roberts
    Deb Roberts says:

    I sold a small 2 family to a retired couple for $199,000, they will live downstairs and the upstairs in-law apartment will pay them $1,150 a month. That $1,150 a month will pay the taxes, electric, heat, insurance, and put a little money in their pocket each month. They could have rented a house or apartment starting at $1,400 a month then also paid all the utilities. I believe in buying real estate as investment, especially with my IRA.

    Reply
  3. Michael
    Michael says:

    Is the opportunity cost of the down payment factored in? What about the RE fees and commissions? The taxes? Insurance? Lawn care, plowing, repairs? What is the home value the info graphic is based on? I don’t think it’s wise for people to look at their primary residence as an investment. It’s forced savings.

    Reply
  4. Susan Plucinsky
    Susan Plucinsky says:

    I am just divorced and my ex took all the retirement, pensions and has two jobs and trust fund no alimony. Bad deal and I spent a lot on lawyers. I have two houses, one rented and 9000 from being paid off and another 125 from being paid off. Spent all my IRA’s on kids instead of asking support because he was not living here and I am stupid.
    My oldest son sick. Should I sell a little more pension since one rental 9000 from being paid off and take the rent with disability to live and have for retirement.

    Reply
  5. Not as straightforward as it sounds
    Not as straightforward as it sounds says:

    would be nice to see some sources on the infographic. Also, not everyone is fortunate enough to have that down payment required for a home purchase. I choose to rent in a safe neighborhood where I cannot afford to buy rather than own a home that I can afford in the surrounding sketchy neighborhoods. Saving a buck is not always the only consideration…

    Reply

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