Long-term, buying builds equity. But short-term, renting has some advantages.
To make a comparison, take the cost of rent over a few years and the cost of home ownership. For the home, add up the down payment, the monthly mortgage payment, how much you expect the home to go up in value, the costs of maintenance and insurance, the tax savings because mortgage interest is deductible and the cost of selling the home in the future. You can compare all this to what you would earn if you'd put all that money into investments.
While it's tempting to go online and use one of the many rent vs. buy calculators, you should not take their results as the complete answer. That's because national averages for property taxes and insurance that are built into these calculators are likely to underestimate what South Floridians actually pay.
It's probably best to do the math yourself. Check with property tax assessors and insurers to get realistic estimates.
Then you could use the online calculators as a model for the items you should consider. Three sites that have rent vs. buy calculators are www.dinkytown.net, www.ginniemae.gov and www.bankrate.com.
— Harriet Johnson Brackey
SOURCE: sun-sentinel.com
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