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WHY SHOULD I BUY INSTEAD OF RENT?
Answer: You'll love the feeling of having something that's all yours - a home where your own personal style will tell the world who you are. A thriving vegetable garden in the backyard, a tiled entryway, a yellow kitchen...when you own, you can do it all your way! But there's more to owning a home than personal satisfaction. You can deduct the cost of your mortgage loan interest from your federal income taxes, and usually from your state taxes, too*. And, interest will compose nearly all of your monthly payment for over half the number of years you'll be paying your mortgage. This adds up to hefty savings at the end of each year. And you're also allowed to deduct the property taxes you pay as a homeowner*. If you rent, you write your monthly check and it's gone forever. Another financial plus in owning a home is the possibility its value will go up through the years.
* we advise you to check with your tax and/or financial advisors
There are advantages to buying a home versus renting. View these advantages in a financial comparison of buying versus renting using the Buy vs Rent Calculator.
SAVINGS IF YOU BUY
In many cases, the amount of money a renter spends on rent can be about the same as or less than the amount a homeowner spends on a mortgage. With the tax benefit for homeowners, the savings can be significant.
SAMPLE CALCULATION - Buy vs Rent Comparison
The renter starts out paying $800 per month with annual increases of 5%, compared with a homeowner who purchases a home for $110,000 and pays a monthly mortgage of $1,000.
After six years, the homeowner's payment is lower than the renter's monthly payment With the tax savings of homeownership, the homeowner's payment is less than the rental payment after 3 years.
KNOW THE NUMBERS - Monthly Expenses of Buying
Your rental company takes part of your rent payment to cover certain housing expenses. When you decide to purchase a home, you accept responsibility for paying for these expenses (some of the expenses are listed below). They are additional costs of home ownership, and should be included in your budget estimates:
Property Taxes and Special Assessments
Home/Hazard Insurance
Utilities
Maintenance and repairs
Home Owner Association (HOA) Fee: Doesn't apply to all purchases. The HOA fee may include some utilities and maintenance - check with your association
Membership Fee: It may pay for recreational facilities and other services
LOOKING FOR A RENTAL APARTMENT OR HOME?
There are many websites to check online, as well as newspaper and print advertisements. Driving around the neighborhoods and looking for signs can also be a way to find a rental. The U.S. Housing and Urban Development has a good online reference for renters here: Renting
Also, the State of California, Department of Consumer Affairs, has a good online reference here: Landlord/Tenant Handbook
BEFORE YOU START LOOKING FOR A RENTAL KNOW THIS
Know your rights and responsibilities: Federal law prohibits housing discrimination based on your race, color, national origin, religion, sex, family status, or disability. If you have been trying to rent a home or apartment and you believe your rights have been violated, you can file a fair housing complaint. When you live in an apartment, you have both rights and responsibilities. Be sure you know what's expected of you - and what you can expect in return.
WHAT DO YOU NEED?
Figure out what you need: It's a good idea to think through what you need in an apartment before you begin shopping. How many bedrooms do you need? Do you need to be close to work, transportation, or something/someone else? Do you need parking? Make a list before you begin...that will help you in your search.
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