Is renting a home less costly than buying a home?

Renting vs. Buying

• Is renting cheaper? No. Given the same house it will almost always be cheaper to own than to rent. Here is why: Somebody owns that house. And there is probably a mortgage on it. Let's say the mortgage payment is $500. If I owned it and rented it to you I would not charge your $500. I would charge you $650 or $700 because I would own it to make a profit. Not to mention the fact that a home owner is always getting equity while a renter is not. On the flipside as a renter you do not have to worry about repair, taxes, insurance, etc.

• Don't forget the tax advantages to owning the home! Depending upon where you live, there may be programs to encourage home ownership or to assist low-income and first-time buyers. In our town we have an infomercial on TV every Wednesday night in which two realtors review "available properties for no money down and monthly payments less than you'd pay for rent!" I recommend a book called "Live Debt Free," about buying a small property when you're young, making double payments so you own it outright in 15 years, then selling it for an appreciated amount which you use as a down payment to buy the home of your dreams in your middle age. That comparatively large down payment means you'll have lower monthly payments, which might mean one spouse can stay home with the kids or more income would be available for travel or high living. It's the kind of book you have to give as a graduation present, 'cause by the time you're my age it's too late!

• Keep in mind that there are one-time costs associated with the purchase of a house, like closing costs and realtor fees. If you only plan to live in a place for a year or two, this averages out to a lot of money per month, and usually makes it cheaper to rent.

• Use the Ginniemae.gov calculator to compare the advantages and considerations of owning vs. renting a home.

I think this partially answers the question. The assumed rate of appreciation does change the return and decision process. If, for example, the real estate market is running at a 2 to 3% decline each year...renting makes sense. If you had appreciation...of 3%..then yes, it would usually make sense to buy. Interest rate, condition of the home you want to buy, your plans and time frame all make a difference. For instance...what if you only wanted to live in a home for 2 years? Closing costs to purchase and then later sell make the decision to rent more realistic.

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Renting home is better in some cases..

If your rent is very low.

If you plan to moving in a few years or months.

I personally prefer to rent an apartment. I have been renting a 2 bedroom for $800 a month while continuing my real estate enterprise so far for the past 4 years -- any defects are paid for and fixed by the propery owner and I can continue my enterprise and not keep any properties under my wings for extended periods of time this enables me to be able to leave the country for travel fun without worrying too much about vandals, home insurance, property taxes, repairs, etc... as I build my fortune for the next 15 years at which time I will then use some of the savings to begin winging some of the properties for my own personal retirement portfolio-- in the meantime... the IRA account looks wonderful. I urge anyone to teach their 20 year old son or daughter how to do foreclosures the same way I do them and to save what they can and prepare themselves for an early retirement by age 40

Renting a home will give you more chance to save it is best to rent if you still don't have budget to buy your dream house. If you know how to handle properly your money surely that you can save a lot from your money while you are renting.