A reader recently asked me to name cities where it’s cheaper to own a property than rent. That’s a big question, but easy to answer.
It’s cheaper to own than rent in most.
How’s that possible?
The secret is in the buy.
Perhaps a better way to phrase the question is to tell me either how much you’re paying in rent, the amount of the house payment you’re willing to cover, what neighborhood you’d like to be in, the amenities you’re seeking and the amount of repair or maintenance you’re willing to do.
Of course, it’s paramount you have a conversation with a qualified loan officer to determine whether you can get a loan, as well as the price range we can shop in.
From there, we work the numbers backwards.
Remember, there’s another unit or units paying a substantial portion of the mortgage. How much you pay in “rent” (in this case your share of the mortgage) is largely contingent on how much everyone else is paying.
How much are the property taxes? In a down market, is it possible for them to be reduced?
It’s important to note that while in the state of Minnesota you do get something of a tax credit through a Certificate of Rent Paid, it pales in comparison to the tax deduction you receive for the amount of mortgage interest you pay.
Oh? And if you haven’t owned a home in the last three years, the government will pay you $8000 to buy one before December 1.
And finally, don’t forget. You get to depreciate the part of the property you don’t live in.
Got a specific number or financial goal in mind? Let me know. I’d be happy to help you achieve it.