Can you really afford to keep renting?

October 21, 2008 at 11:05 pm Leave a comment

Your First Home: The Proven Path to Home Ownership

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.

 

Copyright © 2008, available at Amazon.com

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