Owning a Home Archives

Renting Versus Buying a Home

rentorownRenting versus Buying, one of the most debated topics you will ever see. I would like to offer my experience.

First off let me disclose that I am a 25-year-old home owner. I purchased a house for $126k in a Cincinnati, OH suburb. The school district is solid and the commute is manageable downtown.

Lets talk about my house a bit. Right off the bat – I put about $25k into rehabbing the house. I also received the $8,000 housing credit from the government, so lets just say I’m $126 + 25 – 8k = $143,000 into my home.

I currently owe about $118k on the house. I had it appraised in Sept 2011 for $160,000. I’ll come back to this more later, but for now lets move onto Renting versus Buying!


Lets talk about monthly costs.

My Home:
$889, taxes, insurance, and mortgage
$60 a month to maintain

Lets say I have to put $5000 into this every 5 years for a disaster, or new windows, or a new furnace, etc. – $5000 / 60 months = $83.3 a month. I know this is a bit grey, but I’m going to call it $80 a month.

Lets say a fix cost $1029, or $1030 a month

What do I get out of it:

Equity: $165.33 a month
Interest Deduction: Year 1: $118000 * 4.25% = $5015 interest expense.


Lets talk about itemizing.

A whole new world opens to you when you itemize, but you lose your standard deduction when you itemize. It is one or the other. Sadly because I have a low interest rate my itemized was only about $3400 over what a standard deduction would have been. Because I am taxed at 25% that is about $850 a year or $70.83 a month. Let’s call it $70 a month savings.

Disclaimer: Always contact a tax professional for filing a tax-return or tax advice. I am no way shape or form offering any tax advise.


So lets add up owning for me.

$1030 a month – $165.33 Equity – $70 Deduction Savings = $794.67 a month in net cost.

That’s $795 for a 3-bedroom, 2.5 bathroom 1600 square foot home with a 2 car garage and a laundry. Also a beautiful Island Kitchen.

AfterKitchen

Renting a home this size would run about $1000 – $1300 in the area. You can find cheaper places, but I have to believe you are talking a minimum of $1000.  You could however downgrade to an apartment or condo in my area for $599 (1 bedroom) – $800 (3 bedroom apartment), Condos run anywhere from $750 – $1000. My point here is, it’s definitely a little cheaper than renting if you want to live in a house.


How to save 18.8% to 22.6% at Home Depot or Lowes

Lowes Coupon 2012Want to save money at Home Depot or Lowes? Save thousands of dollars with this technique.

18.8% without being a contractor. Impossible right? I did say this was “Epic” finances didn’t I?

Let me give a brief reason why this was so important to me, I bought a house that needed rehabbing. How much rehabbing? $25,000 worth. I did it all myself.

I did not take advantage of the full 18.8% to 22.6% due to time constraints, I averaged probably more like 14%, do not fail me. I am giving you amazing advice.  I am so happy with this advice I’m going to add a PayPal donation to my site (Button is on the right). If I save you hundreds or thousand of dollars, why not toss me a little something? Your choice. Regardless I hope it serves you well!

The are many ways of doing this, but I am going to offer you several ways.


The Easiest and Best Method of Saving Money at Home Depot or Lowes.

Lets start with the foundation of our journey. 10% off Lowes Coupons. If you are doing any major work on your home or business you need to obtain purchase Lowes coupons. They are honored at Home Depot for 10% as well.

Lowes Coupon 2012

Where are they? For now they are found at the Post Office. Where at the post office? In address mail forwarding packets, NOT the online packets – the non-internet changing packets. They are kept on the counter sometimes in the lobby but most of the time they have them behind the counter.

This has gotten tricky and messy. You don’t want to be the weirdo that is asking for those packets,  I don’t even want to drive to the post office. I’m lazy.  Also they started put in dummy coupons – instead of 10% off up to $5000 of purchase, they have things like $5 off $50 (which are trash comparatively). Well remember when I mentioned some post offices keep them on the counter in the lobby? Well most post offices do this because people steal them all to sell.

Coupon Price on Ebay – Roughly $2 –$3 each depending on timing. Note, make sure they are not expired.

This is the start of our journey. 10% off. Getting $3000 worth of new flooring, $300 cashback at the time of checkout. (Did I mention there was a paypal donation button?). But there is oh so much more.

Next Step, Buying Giftcards.

There are three methods for this, which is good because it presents options. I will offer you my best option first.

Option #1:
Plasticjungle.com – Where you can buy Lowes and Home Depot Coupons for 7% Off (Current rate). Did I mention, they TAKE CREDIT CARD? Another 2% on your credit card. That is 9% cash back.

Untitled-2

Option #2:
Buy off Ebay – Approximate savings, 3% plus Ebay bucks of 2% (or more depending on promotion, NOTE SOME PROMOTIONS EXCLUDE GIFTCARDS).  Plus Credit Card – 2% more. That’s 3+2+2 = 7% cash back (or more depending on promotions).

Option #3:
Buy Gift Cards from your local grocery store for gas perks. Kroger has run promotions in the past for 4x points, which is the only time I would take this option over the first two options. With my local Kroger I get $.1 off per gallon for  every $50 spent and when its 4x promotion that is $.4 off. You also get back 2% from credit card.

$.1 * 12 = $1.2 / $50 = 2.4% Cashback (All the Time)
$.2 * 12 = $2.4 / $50 = 4.8% Cashback (Only when 2x Gift Card Promotion)
$.4 * 12 gallons = $4.8 / $50 = 9.6% Cashback (Only when 4x Gift Card Promotion)

So lets call it roughly 4.4% – 11.6% cash back depending on grocery store and promotion and size of gas tank (I actually get more like 15 gallons at a time which greatly increases all of the cash back.)

Why can this option be good? When it can be done without delay. Obviously when they have the 4x promotion at my Kroger it is more than worth it, because if I get 15 gallons a time at 4x promotion its 12% cash back + 2% CC which is 14% cash back.


Combine the savings and go to town. No limits except whatever your gas perks program limits you too.

Option #1 – Buy 10% coupons, Buy Gift Cards from Plasticjungle.com and get 8.86% discount = 18.8% off

Option #2 – Buy 10% coupons, Buy Gift Cards from Ebay and get 7% discount = 17% off.

Option #3 – Buy 10% coupons, Buy Gift Cards from Grocery store get back 4.4% to 14% cash back = 14.4% to 24.0% off.

Did I mention I have a paypal donation button on my website?


When you go to home depot and pull this off and save 18% off on $2000 worth of goods, that’s $360 off your $2000. Gasp.

Side note to all of this, I saw a guy in Lowes buy appliances when I was looking for something and he was literally in the process of checking out for $3200 something — without a 10% coupon. I almost passed out. I scrambled pulled my wallet out and found one… “WAIT WAIT!!!!” I handed it to him. Cashier scanned, –$320 off.

“Thanks – that means a lot”

“No problem”  (but what I was really thinking, give me half.)

Next day, was short a coupon for myself…. *Faceplant* The guy was literally holding his child (who was sleeping) when checking out with all of his fancy appliances. I don’t regret it. Sure it ended up costing me about about $40 the next day – But “Lisa needs braces” (I assume his child’s name was Lisa, and it’s a The Simpson’s Joke)

Go out and SAVE!

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