Just last week, I had the privilege of listing another beautifully rehabbed property in South Philadelphia: 1915 Fernon St (shown above). Please feel free to click here to view this property’s website, pictures, and video.

I had written a similar article back in February, where I analyzed a listed property for sale against settled/pending rentals in the area. The purpose of the analysis was to compare and contrast the “Pros & Cons” of renting versus owning; from both a financial and a preferential perspective.

Let’s look at a “Rent vs Own” comparison for 1915 Fernon St and the surrounding area:

Option #1 – Rent (Similar homes around 1915 Fernon St)

• Average Rent: $750
• Upfront Costs: $2,250 (First, Last, & Security)
• Monthly Payment: $750 (Rent) and $25 (Renter’s Insurance) = $775
• Is this considered an investment? No
• Are there any tax benefits? No

Option #2 – Own (1915 Fernon St)

• Sale Price: $100,000
• Upfront Costs: $3,500 (Down Payment, FHA), $5,100 (Closing Costs, Estimate) = $8,600
• Monthly Payment: $489 (Principal/Interest), $93 (Mortgage Insurance), $14 (Taxes), and $50 (Homeowner’s Insurance) = $646
• Is this considered an investment? Yes
• Are there any tax benefits? Yes

Just like last time, I also went over some non-financial factors that can also either persuade or dissuade someone from buying a home when they have always rented.

Here are some Pros/Cons of “Renting vs Owning”:

Option #1 – Rent

• Pros: It has cheaper upfront costs, you are not responsible for repairs (unless you break it), and you can usually decide to leave after staying for about 1 year.
• Cons: It’s not your own home, you can’t make changes/upgrades, you’re subject to a landlord/landlady, your money is not invested in anything, you do not get any tax benefits, your rent can increase, and you’re not really interested in what happens to this property in the long run.

Option #2 -Own

• Pros: You are investing in a neighborhood/community, you own a tangible asset, you have the ability to hold/sell/rent, you can make changes/upgrades, you get tax benefits, you can fix your principal/interest payment, and you could potentially gain appreciation.
• Cons: You’re not sure what price is fair, you cannot predict the future, and you may not want to stay for a few years.

Again, based on the numbers above, it’s cheaper to buy than it is to rent for this scenario. But as you can see, there is more that goes into it than just stating the obvious. It’s really a matter of wanting to make an investment and a commitment, or not. There are those out there that feel like renting is a complete waste of money, time, and resources. But there are also those who feel the same way about owning.

If you have any questions about renting versus owning, please feel free to give me a call or send me an email; I handle both kinds of situations. So for me, it really comes down to what’s best for you.