Are you still renting a home or apartment?
If so, you’re losing money. Think about these three ways you lose money by renting:
1. Why pay someone else’s mortgage payment. You’re missing out on the appreciation that the property gives to the landlord. (Appreciation) term used in accounting relating to the increase in value of an asset, which means in real estate terms, added value to the property. Over the past five years, houses appreciated significantly.
2. Renters don’t get to freeze their monthly housing expenses like home buyers can. Of course, many home buyers get mortgage payments with adjustable interest rates and their payments go up over time. However, these payments will not go up over the long term like rising rents. Just think about how much an apartment costs today compared to ten years ago. A two bedroom apartment in Portland, Oregon leases for $1,000 – $1,600 today. The exact same apartment rented for $595 in 1996, when it was brand new. Home buyers who had low monthly payments in 1996, who did not refinance their mortgage, enjoy low payments and don’t have to worry about rising rents.
3. Renters don’t benefit from tax advantages. Home owners get income tax deductions. Tax deductions for interest costs, for instance, save tax payers thousands of dollars.