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Dan Brassil

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Renting vs. Buying in St. Louis

Buying a home has long been a piece of the American Dream. Not only does it signal security as an investment, but also represents the freedom that comes along with ownership. For many, buying a home is one of the biggest decisions they will make in their life. Home ownership is not for everyone though. For some, renting a house or apartment is a better choice due to affordability or frequent job relocation. With housing prices having dropped drastically in recent years and mortgage rates still at historic lows, now is the time to thoroughly analyze whether buying or renting is the best choice of housing. In general, if you are certain that you will live in the same place for the next five to seven years, buying can have a significant financial and personal advantage to renting. But it’s not always that simple. Let’s take a look at the pros and cons of both alternatives.

Renting can offer a few advantages over buying. These include little to no responsibility for maintenance, ease of relocation (providing one is not in the middle of a lease), and even lower monthly costs than buying a house in the same area. The disadvantages of renting include no tax benefits, no equity buildup, no control over rent increases, and possible eviction.

For many, buying offers more advantages over renting. Instead of paying a landlord once a month for rent, your mortgage payment is paying down your debt of ownership. Owning a home is an investment as the property builds equity over time. A rented property also builds equity, but unfortunately this is only for the owner. Another advantage is that mortgage payments (assuming a fixed rate) remain the same over time while rent increases by an average of 3-5% / year. As a homeowner, you are free to change the décor and landscaping. Ownership also brings about a sense of community, stability, and security. Finally, there are great tax benefits for home ownership. The disadvantages of buying include payment of property taxes, responsibility for maintenance, risk of foreclosure, and less mobility.

After looking at the pros and cons of each. Let’s take a look at the possible savings associated with buying. The chart below shows a cost comparison for a renter and a homeowner over a seven-year period.

  • The renter starts out paying $800 per month with annual increases of 5%.
  • The homeowner purchases a home for $110,000 and pays a monthly mortgage of $1,000.
  • After 6 years, the homeowner’s payment is lower than the renter’s monthly payment.
  • With the tax savings of homeownership, the homeowner’s payment is less than the rental payment after 3 years.

renting-vs-buying-graph

Over the last year, there has been an upward trend of renters making the big jump into ownership. This is not surprising considering where home prices were, say, five years ago, and the fact that interest rates are still at historic lows. For many renters, now is the time to consider what was previously simply an unaffordable proposition.

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6

He went above and beyond when trying to help get us in a new house when ours sold so much faster than we expected.

9

Employing him as our realtor was the best decision we could have made as first time homebuyers.

3

We’ve sold two homes with Dan and purchased one and each experience with him has been nothing short of low stress and great results.

12

Dan and his assistant Christy kept us on point throughout the contract process.

1

Dan was honest and looked out for my best interest. I truly felt like he listened to what I wanted in a home.

5

He guided us through the process of 3 different offers and made sure that we weren’t over paying.

11

Dan was the most honest and straight forward person during the entire process.

2

He helped us do what felt like the impossible, buy a home well within our price-range, with the space we need in the location we want.

8

Throughout the whole process, he was on point, always had an answer or a solution to our concerns.

10

He was instrumental in getting issues addressed that came up in the inspection and made us feel confident that we were making a sound investment. 

4

His knowledge of the city and older homes was a huge help in carefully evaluating the condition of each home we entered.

7

You could tell his effort was a reflection of his desire to genuinely help us and do well at a profession he’s obviously passionate about.

About

about-dan

"As a community specialist, I match buyers with homes and sellers with the marketing and pricing advice that sells."

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Licensed Missouri Realtor

601 E Lockwood Avenue
Webster Groves, MO 63119

3353 Roger Place
St. Louis, MO 63116

8151 Clayton Rd. Suite 301
Clayton, MO 63117

M | 314.452.8211
O | 314.352.5200
E | info@danbrassil.com

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