Renting Vs. Buying
So you're curious about what rent cost is compared to buying costs...
Let me preface this by saying that each persons situation is different, and because of that there are some situations that are different and renting can make sense. That being said OVERALL buying is more cost effective. and here is the breakdown.
Let's approach this from the basic numbers. When someone rents a property they are covering the cost of the mortgage, increased rental property taxes, insurance, and maintenance. So the majority of those costs are the same as when you own your own property. However the big one is the property taxes. When a property goes from being owned and occupied by the legal owner to a rental property here in South Carolina, The property taxes triple. So that means that the added costs need to be covered by the renter.
The basic argument of buying a house vs. renting is this, when you buy a home you are basically starting a giant piggy bank, and every mortgage payment adds up and at least some will come back to you if and when you sell, at least that is the premise. When you rent you are basically doing that for someone else. Now to address the other side of the argument. If you buy in a manner that is unsustainable, then if the market turns you can make your mortgage payment and you have to sell at a loss. This can be true. Also a good side note is that if you intend to own the property for longer than five years, there is a good chance you will accrue equity. Increasing your chances of getting money from the sale.
If you have the capability to buy, see my page titled "can I buy a house," and you intend to own the property for 5 years or more, seriously consider purchasing. Now here is the tricky part. That "sustainability" part I mentioned earlier. To determine the sustainability, look at your budget, and have an honest conversation with a real estate professional, and no that is not just a shameless plug. Realtors will be able to give you an idea of what costs may be coming in a few years and what you may need to do if you intend to sell in a few years time.
Renting a home is a great option for people who have credit issues, income restrictions, or simply move around too much to build equity. If you are renting and you are trying to work on these things, I highly recommend contacting a mortgage professional, they can tell you exactly what you need to do to get where you want to be.
This is intended to be a helpful article to allow for you, the reader, to get an honest look at renting vs. buying. If you need to contact a mortgage professional or simply want to ask about input on your specific situation, please do not hesitate to reach out.
All the best,
Keven Beach, Realtor®