Estimated total savings represents the financial benefits tenants gain by opting to rent rather than own their homes. This includes the tax and interest payments renters bypass because they aren’t homeowners, along with homeowners association dues and maintenance repairs that are the landlord’s responsibility.
Some argue that landlords integrate these expenses into the rent. However, if extra costs render properties less attractive in a competitive market, landlords often bear the financial burden of taxes and interest themselves. This situation allows tenants the freedom to save for future home purchases or other financial goals.
Example to Illustrate§
Suppose a homeowner pays $1,000 in mortgage expenses, while similar rental properties cost $750 per month. In this scenario, a renter enjoys a total savings of $250 per month, representing the avoided tax and interest costs. Over time, such savings can be significant, contributing to a potentially faster accumulation toward a future down payment or an alternative financial objective.
Related Terms: rent vs own, monthly rent, homeowner association dues, property taxes.
