MEMPHIS HOMES - RENT vs PURCHASE

I'm moving to Memphis and not sure if I should rent or purchase a Memphis Home, as I only plan to be there for about three years. We hear this allot from our clients. We usually give them some rental leads and information to help them make a good decision for their family. Of course the answer is to purchase, but that is a decision they will have to weigh out in their own minds.

The person that benefits from the rental is the landlord...that is why they purchased property as an investment in the first place. Renters never see their rent money again, while homeowners, in worst case scenario may break even in three years. Additionally, renters can not use their rent payments as a tax deduction, and if you ask, you would find out that the mortgage interest tax deduction is one of the very best deductions that exists for homeowners. This deduction is also the single best financial argument for buying rather than renting. Check out this example..:

If you can afford a mortgage or rental for $1200 a month (this would be principle and interest only for a homeowner), then if your credit is in proper order, you can purchase a home valued at up to $200,000 and put down 10% on a 30 year mortgage at a rate of 7% (current rates are as much as one percent less that this). In the first twelve months of a fiscal year starting in January, you would have paid in approximately $11,300 in interest which is entirely deductable for tax purposes. If you are in the 27.5% tax bracket, then you would save $3107 in taxes, or $259 per month. Effectively, this would make your monthly payment actually equal to $941 per month. Additonal expenses on your note would be property taxes....and guess what....they are tax deductable as well.

So the question is not "Can a renter afford to purchase?" The question is can a renter afford NOT to Purchase.
For answers to more questions, please visit http://www.BluffCityRealEstate.com .