Stop Making Your Landlord Rich

Dated: 04/11/2016

Views: 237

To Buy or Rent??? Here's a little food for thought.. I recently had clients that were beginning to feel like they couldn't afford to buy a home. To put things into perspective for them  I  sat down and drafted up the pros and cons on renting vs buying. As always I just want the best for all my clients and I am happy to say they bought!  If you are struggling with the decision please read the email below I sent my clients, trust me its worth the read!!


Your current monthly rent is $1370.00.  I am also going to add 4% for your monthly renters insurance of $54.80 for a total of $1474.80 a month.  For 5 years (60 months) the total is $85,488.00.

Your mortgage payment with everything included (principle, interest, taxes and insurance) is $1756.51.  5 year total is $105,390.60.    With owning the home you now get to write off all interest and property taxes.  At your income level you are at a 28% tax rate.  After writing off the interest and taxes for 5 years your tax gain is $16,006.00.  After subtracting your tax savings your 5 year total payment will be $89,384.60.  
That is a difference of $3,896.60 more you will spend on owning this home. 
That total is without counting any appreciation on the property.  From October 2014 to October 2015 properties in Chandler appreciated 5%.   If the property  appreciates at the current rate for 5 years you will have accrued $88,410.10 in equity.   To be conservative lets say the home appreciated at 3% for 5 years.  At 3% you will gain $50,967.70 in appreciation. 
When you count the appreciation at 5% you will be up $84,513.50 in those 5 years and at 3% $47,071.10.
This isn't an email to persuade you guys to purchase this property.  My intention is to show you the actual numbers between renting and owning.  The financial gain is significant to own.  You are paying more monthly but after the tax write-off savings you are basically even.   When adding appreciation you are thousands ahead.  
 

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