Renting or Buying

Renting or Buying

Kimberly Grummert

COM/172

May 23, 2011

Renting or Buying

Is renting or buying better? This seems to be one of the most common questions people ask other than what is for dinner every night. Although every personal situation varies, there are a number of reasons that point one in the direction that buying is far better than renting. Buying a home, when viewed from a specific standpoint, is shown to be the best option of the two. However, even from a diverse standpoint there are still several reasons why buying a house is better than renting.

Equity

Whenever referring to equity in a home, the definition would be the value of an ownership interest in a property. Owning a home is a significant way of gaining equity. This is also a way to have an investment. Whenever one chooses to buy a home the payments which are made by that individual contribute to owning the home. The greater the amount that you pay for the house, the higher would be the equity which you have within that house, and when all the relevant payments have been made, you would have that amount of money in the form of equity which would be in your name (Allalouf, 2010). This form of equity would be unavailable to someone that was just a renter and not the owner of a home.

Along with purchasing a home will be added expenses that cannot be avoided. These expenses are home owner’s insurance, no landlord to call for repairs, and, of course, property taxes. However, it is a basic mathematical point that the equity that would be gained from owning a home would outweigh the money saved from those property taxes and repairs mentioned above. The experts at the Nationwide Biweekly Administration have broken this down in numbers to describe exactly how bi-weekly mortgage payments can save an individual a large amount of money in interest over the course of the loan:

If your mortgage payment is $1,000 you will spend $12,000 over the course of one year on your mortgage. If you made...