Warning: You Will Know How To Rent And Buy Houses After This

Often times, people hover between the decisions between buying and renting a house

. Both of them are truly important because they require much financial effort. Some people will argue that owning will cost significantly more. This makes sense. But there is also another school of thought that says owning a home does not need to cost a lot. In the long run, it will cost even less than renting a house. The decreasing prices of homes over the past few years contribute to this fact.

At first glance, buying a home yourself will look like a very expensive option, if compared to renting. Of course, this is true if you say $100,000 (total price of the house) is more expensive than $500 per month. This is because you suddenly need to think in terms of huge money sizing instead of small portions that you pay every month for rental.

But how to compare the true costs of these two options? You can do this by a monthly basis. But this calculation requires you to make the mortgage rates fixed instead of variable ones.

You should also ignore opportunity cost of owning. This is described constantly by financial commentators. They say that the money you put into buying your house cannot be put elsewhere.

However, when you own a home, you are actually owning a real estate property! Statistics have shown real estate properties do appreciate in value over the years. Therefore, your very own home will give you returns in the long run. Secondly, thinking about opportunity cost of owning often complicates the whole process, sometimes freezing you from taking action.

by: Lisa Wash

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