I am two days away from owning a house. Now to some this is a loaded statement. I have friends who would argue that I don’t own my house, the bank does. I have a few angry uncles who would tell you that you never own your house. Even afters its paid the mortgage off, you will have to pay taxes for the rest of time. Many life long renters believe this and hold these examples up as the reason why home ownership is not worth the hassle. Home owners tout the appreciation in value and the building of equity that home ownership provides. Here are the main Pro’s and Con’s of each scenario:
- Control over your living space
- Appreciation in the Home’s value
- Maintenance and repairs
- Mobility, you can move very easily.
- Cost, it’s usually cheaper
- Repairs are the landlords responsibility.
- Cost of living increases, rent hikes.
- No equity.
Obviously as someone who is about to buy a house you can see where I fall in the argument. I have rented and it was fine, but every month when I mailed that rent check I knew it was money out the window. I realize that there are million of people who bought homes in 2005-2007 who are under water and trapped. We live in a complex world and its hard to know what the right decision is.
Every case is unique, many factors are involved. To help you weigh your options I have found this calculator from the New York Times. It incorporates many variables in an effort to give your the clearest picture. In the end it calculates the cost of rental against that of home ownership. It provides you with the monthly rent amount for a comparable home in your area. If you can find a place to rent for that price then owning is probably your best move.
I entered all of my data into this calculator and it told me that I would have to find a smilier sized house for $1500 a month rent. Where I live, this close to NYC, that is not possible. As far as this program is concerned I made the right choice.
Give it a try and see what numbers come back, you may be surprised.