Buy vs Rent
Some people feel that buying a home makes more sense than renting. To determine which is right for you, you first need to figure out whether you can afford to buy. Then you need to consider other factors, including the time you'll stay in your new home, the home's prospects for appreciation and taxes. If you buy or sell in a short period of time, you could lose the equity in the property, so if you are not sure you want to stay in the area for over a couple of years, buying may not be the correct choice to make.
Please keep in mind that your decision to buy a home is not only a financial one. There are many emotional reasons for wanting to own the home that you live in, even when the numbers don't justify the purchase. Learn the tradeoffs, potential money savings and which option makes sense before making your decision.
Owning a home rather than renting will help you build equity when paying your mortgage as your property appreciates in value, this benefit alone gives home ownership the financial edge over renting. Paying your mortgage on time each month will help to reduce your principal, this reduction may seem small in the early stages but it will accelerate over time. The appreciation will vary from year to year and there are times when the home will depreciate, don’t be alarmed by this trend however average appreciation on a home is approximately 5%.
Owning a home is often more expensive than renting at first home ownership can be very affordable and a great investment alternative. For what you may pay to rent, you could own your own home.
Use this Rent vs Own Calculator to determine whether it is a better financial decision to rent or to own a home.