Can you really afford to keep renting?
A Keller Williams ® Realty Guide
By Gary Keller with Dave Jenks and Jay Papasan
Shelia’s $900 mortgage includes $700 of interest. Her total house payments are $10,800 annually. At the end of the year, $8,400 (12 months x $700) is tax deductible in the United States. She is in the 28 percent tax bracket, so her savings are $2,352. Her actual housing costs for the year are $8,448. ($10,800 – $2,352).
Buying vs. Renting
Shelia’s friend Chris believes he “can’t afford” to buy. He pays $800 in rent each month. Chris’s housing costs for the year are $9,600. So, even though he thinks he’s saving money by renting, he actually spends about $1,150 more than Shelia-and he’s not building any equity.
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