The Cyndi Nelson Team at MVP Realty Group
Cyndi Nelson

To Rent or to Buy? That is the question!

One of the frequent questions that I have gotten as a Realtor, especially from clients who are on a fixed income and are downsizing from their current home, is “Should we rent or buy?” It’s an important question and requires some thought and expert advice. Here is a simple overview of things to consider.

Equity and tax savings

When you buy a traditional home, it appreciates over time and the interest you pay on your mortgage is tax deductible. That can save you thousands of dollars in taxes, especially if you are in a higher tax bracket.

There are no tax deductions if you rent and no equity gained with your monthly payment. When you rent, you will usually pay an initial security deposit, your first month’s rent and possibly the last month’s rent. Your rent can be raised at the end of your lease period and will probably increase annually.

Insurance costs

Do you have enough savings or enough proceeds from the sale of your current home to put 20 percent down on a mortgage for a new home? If not, you will probably need to pay private mortgage insurance, which can be several hundred dollars a month. That cost is not tax deductible and does not contribute to paying down the principle of your mortgage.

If you own a home, you will need homeowner’s insurance and you may have Home Owner’s Association (HOA) fees.

If you rent your home it is wise to purchase renter’s insurance, often less than $200 a year.

Maintenance and upkeep

Annual upkeep when you own a home may include things like replacing a hot water heater or painting. Homeowners need to establish a reserve fund so that when repairs are needed, the funds are available. Enhancing and maintaining the condition of your home helps preserve its value so that there is substantial equity when you are ready to sell.

When you rent, maintenance is usually the responsibility of your landlord. Maintenance can be an issue if your landlord does not take care of necessary repairs right away.

An inexpensive option

Another living option to consider is purchasing a manufactured home in a manufactured home park. Our area has quite a few to choose from.

Financing can be difficult for a manufactured home in a park so it is best to pay cash. Monthly fees for living at the park will run between $350 and $650 per month.

There are no income tax deductions for the home but your monthly payments will be quite low. Manufactured home values tend to depreciate rather than appreciate so you will probably not be able to recoup your initial investment.

Whether you choose to own or rent, it is wise to get the advice of an expert to help you with your choices so that your home fits within your budget and meets your lifestyle needs.

For more than two decades, I have helped clients—seniors, first-time home buyers and move-up buyers—find the right home for their lifestyles. In today’s hot housing market, it is important to have a Realtor on your side who is skilled at helping you find the home you want. Call me at (360) 701-4223 or email me at


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