Question

Sasha has just gotten a new job in a nearby city. After comparison shopping, she found that renting a nice two-bedroom apartment would cost around $800 per month. Her utilities would cost about $150 per month.

Sasha has enough money saved for a down payment, and she found that she can buy a three-bedroom house or condo with a mortgage payment of $1,000 per month, including taxes and homeowner's insurance. Her utilities would cost about $200 per month.

What is the advantage of buying the house over renting the apartment?

Sasha’s monthly expenses would be less for buying than for renting.
The extra expenses in the mortgage payment cover all maintenance and repairs.
Sasha’s down payment will likely be less if she decided to buy.
Sasha will own the house and earn equity as its value increases.

Answer 1

The advantage of buying the house over renting the apartment is that Sasha's monthly expenses would be less for buying than for renting, and she will also earn equity as its value increases.

Step-by-step explanation:

The advantage of buying the house over renting the apartment is that Sasha's monthly expenses would be less for buying than for renting. While the mortgage payment for the house is higher than the rent for the apartment, the cost of utilities for the house is lower. Additionally, Sasha will own the house and earn equity as its value increases, which is not possible with renting. Although there may be extra expenses for maintenance and repairs with buying, these expenses can be budgeted for and may not necessarily outweigh the advantages of homeownership.