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and underestimate how much it costs to maintain a house when comparing costs.
Prospective homeowners have no idea what it costs to maintain a home and many homeowners don't know either!
But real estate investors have a rule of thumb that it costs 5% of the VALUE of the home, PER YEAR, to maintain it. Now, this is for leasing to renters, who tend to be harder on homes than homeowners, so the estimate is probably too high for most homeowners.
I think the number is closer to 1% to 2.5% of the value, PER YEAR, for homeowners. The actual costs will vary from year to year (some years you just need to change light bulbs, other years you need to paint the house and replace a couple appliances). They'll also vary based on the condition of the house... if it's new or well maintained, 1% is probably enough. If it's older or just in bad condition, you might have to go up even past 2.5%.
Either way, if you're going to compare the costs of owning vs renting, I think you have to include the cost of maintenance. In my personal case, I bought a new home and the tax savings have been bigger than my maintenance costs. The difference, however, gets smaller each year as I pay down my mortgage (and therefore reduce the interest) and this house requires more maintenance. And the equation could be totally different if I bought a different house.
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