Rent to Own
Many people don’t realize how much of a benefit there is to being a homeowner. But the example below clearly shows just how quickly equity (the difference between the market value and what you owe) on a home can build up, whereas when you pay rent, you will never see that money again!
If you Rent:
Yearly Paid Rent
Where did your rent ($162,768) go? To your landlord!
If you Own:
Value Includes Appreciation**
After five years, you may realize $147,739 in equity if you purchase (plus received possible tax benefits), but when you rent, you will have poured $162,768 into your landlord’s pocket!
* Includes Principal and Interest only on a 4.00% mortgage with a purchase price of $475,000
** Appreciation rate estimated at 5% annually on a $475,000 home
*** Based on the declining principal balance
**** Difference between what you owe and the possible market value of the example home based on 5% annual appreciation.