This is a topic that has been talked by many people for a long long time. Some people
say buying house is an investment, you pay mortgage, and eventually, the house is
yours. But renting is like throw your money to water, you pay the rent, and you
will never get one penny back. On the other hand, owning a house
is too costly.
All kinds of fees, maintenance, and you also have to pay a huge amount money
for interest. If the market is not good, house value may go down. You may end
up not able to sell it, or foreclosure stuff. But renting is cheap, no maintenance,
and more flexible. So, the question again, should I rent, or should I buy? Buying a house
is also a very emotional move, because I always think your house means your home,
your family. It is really a hard, and big decision you need to make carefully.
Here, for purely financial purpose, I made some comparison on renting
vs. buying.
The basic idea is, both start with the same amount of money. Buying side will use
this as down payment and closing cost for buying a new house; renting side will
put the same amount into an investment account with 8% annually growth. Then both sides
will spend the same amount of money each month. Buying side will use this money
to pay mortgage, tax, HOA, insurance, repair expense. Renting side will pay rent,
and put the difference into the investment account to let it grow. At the end, see which side is better. |