Rent vs. Buy

 
You always hear about the financial benefits of buying versus renting. What does that really mean?
Owning Can Save You $49,588
 

Here is a look at the savings over a 3-year period:
Tax Savings from Mortgage Interest	$12,312
Tax Savings from Property Taxes	$1,080
Reduction in your loan amount	$8,820
Home appreciation at 5% per year	$39,406
Total	$61,618
Less Mortgage Payments	-$58,860
Plus Rent for 3 Years (+$46,800)
TOTAL SAVINGS	$49,588

Assumptions

• The average rent for a 2 bedroom condominium near CU is currently $1,300.
• The average sales price for a 2 bedroom condominium in the Boulder area is $250,000.
• A $250,000 condo purchase is financed with a 6% rate Conventional loan with 10% down. The monthly payment is made of $245 principal, $1140 interest, $100 taxes, and $150 HOA dues.
• The purchaser of the condominium is in a 30% tax bracket.
• The real estate market continues to appreciate at 5% per year.
• The estimate does not include income from roommates.
• Past performance is not a guarantee of future results.