How much money could you be wasting by renting?

Are you currently renting but dreaming of homeownership? Are you saving up for your first home purchase, but completely overwhelmed by how much it will cost?

Renting can often seem like it’s more affordable than buying at first glance, however the long term financial impacts of not owning your own property could be costing you thousands in wasted rent money. In this blog post we'll dive into the benefits that come with investing in a home, and discuss exactly how much money you're potentially throwing away if you don't make the jump to being a first time homeowner. 

Build equity rather than wasting money on rent

One major benefit of homeownership is that it allows you to build equity in your home over time. This means that as your home appreciates in value due to market conditions or improvements made by yourself, the equity that you own in your home also increases in value. Unlike rent payments which are an significant outgoing each month for a space in which you can live, but don't own any part of.

Renting is getting more expensive

Depending on your location, you could end up spending thousands of dollars a month on rent alone. Also rent payments can be quite volatile, sometimes changing year on year making it harder to budget than with a fixed monthly payment set for a longer term.  You also don’t know how much longer your landlord plans to keep renting out the property, so there’s always a risk that they could decide to sell and force all tenants out with a very short notice.

On the other hand, when you buy a home, you’re making an investment that pays off. Your monthly payment may be more than rent, but it is going towards something tangible: owning your own home. As you continue to make payments and live in your home, you’re building equity ownership in your home, which means even more money saved.

So what kind of money are we talking about? 

Well, let’s look at an example of the difference between renting and buying. Let’s say you live in a 3-bed single family home with a monthly rent of $2,000. Assuming that your landlord only increases the rent by inflation per annum (c.3%) each year and you stay there for 5 years, that’s $127,416 in rent payments. Now let’s say you chose to buy the same property instead but had to pay a monthly payment to Ownify of $2,484, slightly higher than the rental payment. Over 5 years, you would own an estimated 10% of equity in your home and have an estimated $34,778 accumulated ownership!

It’s important to remember that these examples take into account rental costs versus Ownify monthly payments over five years—which also include homeownership expenses like property taxes, insurance, repairs, and more. When comparing buying a home with a mortgage, it is important to include these additional homeownership costs to ensure you are comparing the total cost of owning your own home.

Make the move, become a homeowner today

Now that you know the true cost of renting versus buying with Ownify, it’s time to make a decision. If you’ve been on the fence about taking that next step towards homeownership, consider all the money you could save by investing in your future now. 

It’s always helpful to have an experienced real estate professional by your side throughout the process. Not only can they provide valuable insight into specific properties, they can offer a knowledgeable guide, keeping you from making costly mistakes that could end up costing you thousands in the long run.

At the end of the day, it’s important to remember that buying your first home is a major decision. By doing your research, and weighing up all the pros and cons and partnering with Ownify, you’ll be able to make an informed decision about whether now is the right time for you to make this big step towards homeownership.   

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