Even though, renting an apartment is a better option then buying a home, buying a home is the better option than renting because renting is like throwing away your money and it is more cost effective in the long run to own your own home and monthly housing expenses are not contributing to build up equity. Renting is like throwing away your money. You are making a temporary investment into someone else’s property, basically you are paying some one else’s mortgage and helping them become financially secure. Here is an example. If you are paying rent at $1,500 per month and your landlord increases your rent by a modest 5% each year, you would wind up paying just about $100,000 over a 5-year period. Worse yet, after paying your landlord over $100,000, you still would not have anything to show for it. Buying a home with a fixed rate, your mortgage will not increase. However, renting an apartment your rent can go up once a year. Monthly housing expenses are not contributing to build up equity if you are renting an
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This note was uploaded on 11/21/2011 for the course COM 156 COM 156 taught by Professor Dr.jessicaguire during the Spring '11 term at University of Phoenix.