The true cost of housing

The Cost Of Housing

Re-read the above headline twice. The cost of renting or buying goes well beyond a rent or mortgage payment, and these days those additional costs add up. TOGETHER, COMBINED we can get an accurate picture of the cost of housing. Below are some of the costs of housing everyone needs to evaluate before purchasing OR renting:

1.   Purchase price.

2.   Mortgage payments.

3.   Rent payments.

4.   Real estate taxes.

5.   Closing costs. (loss of interest income from this)

6.   Loss of interest income from capital used for downpayment.

7.   Insurance.

8.   HOA fees.

9.   Garbage collection.

10. Utilities.

11. Yard, pool maintenance.

12. Repairs and other maintenance.

13. Other fees.

14. Future rent, mortgage payment escalations. 

Of course, after all of this there are the offsets like a tax deduction on mortgage interest, etc. Longterm, the biggest potential upside to ownership to offset these costs is the longterm appreciation of a property that could generate a capital gain that is tax free up to $250k/500k. And equity building too. 

However, too many people speak about rent or purchase prices when speaking about the COST OF HOUSING without referring to ALL the additional costs. Then there is decorating, moving, painting, furniture.....

Without complete inventory of all the facts, there are never real solutions. Or smart decision-making.