Denman Real Estate Group
BRE # 01378663
RENT vs. BUY
There are many tax advantages to home ownership.
Dont pay another cent to your landlord!!!
Start investing in your future!!!
10% Down $45,000 EQUITY
Loan Amount $405,000 @ 5.25% for 5 years fixed
Monthly Payment $2236
After 5 years of appreciation at just 2% = $496,836. You will have gained $46,836 in EQUITY.
Plus the equity you have earned by paying down your principle every month for 5 years.
Total EQUITY after 5 years: $45,000
TAX ADVANTAGES TO HOME OWNERSHIP
$405,000 Loan Amount X 5.25% amortized over 5 years = $102,389 in interest = ~$20,478 per year in tax write-off!!!
Property Tax write off = $450,000 X 1.25% = $5,625 per year.
Heres a simple way to calculate the tax savings your monthly mortgage check will yield:
1) Start with the interest you will pay monthly (~$20,478/12 =
2) Next, add the monthly cost of property tax. ($450,000
purchase price X 0.0125 = $5,625/12 = $468)
3) Next, multiply the total by your tax rate (federal and state
($1,706 + $468 = $2,174 X 33% = $717)
4) The result of $717 is the amount youre saving each month
5) Subtract this from your total monthly payment
($2,236 - $717 = $1,519) This is the real cost of your
POWER OF EQUITY
Once you own a home you start to accumulate EQUITY.
EQUITY = $$$
You can borrow against this EQUITY and use it for whatever you want!
· Purchase a new car
· Pay for kids college
· Pay for remodeling of your house
· Pay for that dream vacation
Best of all, the interest you pay on that borrowed EQUITY is also tax deductible!!!
Rent??? - Why???
Rent: $1800 per month = $21,600 per year = $108,000 over 5 years
·You have not saved anything.
·You have had no tax break.
·You still dont own anything.
·You cant borrow against equity because there is none.
Take a step ahead by investing in your future. Purchase a home instead of renting and paying your landlords mortgage and giving him the tax benefits. You work hard for your money, now let your money work hard for you!!!