Does renting a home cost the same as owning a home on a monthly basis? I have been asked this question over and over again and I keep coming to the same conclusion. The best answer is a straightforward “No.” Many people would like you to believe that it would cost you the same to buy a house on a monthly scale as it does renting. There are many factors that go into this but lets break them down to make them easier to understand.
If you are renting a place for $1000 a month which does not include utilities and all your utilities are another $200 a month, your total payment to live in that place is $1200. Now lets say for arguments sake that your mortgage payment is the same as your rent payment and your Utilities are also the same per month. Thus it should be the same cost ($1200) to live in the home you just bought….Right? Wrong. There are many other costs associated with living in a house. Property taxes, City Utilities for garbage, sewer, water etc, Insurance, and of course anything that goes wrong with that house YOU have to pay for it.
I have seen the advertisements, classifieds and commercials where people are tricked into believing that the costs are the same. In actuality if someone falls for this, they could really get into financial trouble and end up financially strapped. We never want to see that happen to anyone.
I am not saying that renting is better than buying. That is hardly the case. I do believe that if you can get into a house of your own and start building equity and wealth that is great and should be a main goal of yours. I just do not like the misrepresentation of owning a house and renting a place to live because they are not the same cost. You also have to realize that when buying a house there are upfront costs such as property transfer taxes (depending on first time home buyer discount), legal fees, home inspections, appraisals and other costs when purchasing a home. Check into these costs in the area that you are living in since they tend to change from place to place.
Once again, the costs of owning your house compared to renting may look enticing on the advertisements but they can really put you in a hard place if you think it will be the same. I recommend going through all the numbers whenever you are planning to purchase a home and make sure that it is the right thing for you to do. If you have any questions about anything to do with real estate, let us know. Our team is very knowledgeable about the ins and outs of real estate. Whether it is your first home or you are a seasoned real estate entrepreneur we will do what we can to help you reach your goals. Good luck and happy home searching.