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Any of y’all on Nextdoor.com?  It’s a community forum just for your neighborhood and the ones around it.  I do Nextdoor like most people do Facebook.  Anyway, someone there brought up the rising monthly rental costs this past week, and I started to feel that tingle all personal finance geeks get when money starts getting discussed publicly.

“THERE BE MY PEOPLE!!!”

I ran some numbers to help put things in some sort of perspective.  Here’s what I got for the average 3 bed, 2 bath homes around us (outskirts of Houston, Texas) that sell for $150,000-$180,000…

A $150,000 Mortgage Example

A $150k mortgage at 4% for 30 years is about $715 a month.  Then you have an approximate 3% rate for property taxes on $150k ($135k if you have the homestead exemption, but that goes away as a landlord), so that’s $4500 a year or about $375 a month.

Then there’s the $1200-$2400 a year home owner’s insurance policy, the $600 flood policy for non-homesteaded homes, HOA dues that range from $0-$3000 a year, and then the maintenance and repair costs for everything.

That boils down to:  $1300 a month + HOA dues + Upkeep and Repairs

Owning Vs Renting

All in all, if you are renting a $150,000+ home for $1300-$1500, you are pretty much covering the basic costs of owning a home – which means it is a good deal if you rather not deal with all the crap that pops up.  🙂

It’s a different deal if you have pretty good credit, a stable income, cash to put down to make sure the mortgage is where you need it to be, an additional stash for all the stuff that breaks, and you actually wanted to buy a house.  Then you just weigh the options and go with what seems right for you and yours.

One of my blogging buddies (you all may know J Money) owned his own house for 9 years, hated pretty much everything about home ownership, sold his home at a budgeted loss, and his family of 4 will now happily rent for the foreseeable future.

On the other hand, my hubby and I bought our first home at age 23, bought this one at age 29, and have been hooked even though we’ve had to deal with leaks, water damage, hot water heater problems, several issues with a/c’s, and then all the optional stuff we all splurge on, lol.

All in all, owning versus renting boils down to way more than numbers.