Home Scam/Fraud ON THE MONEY: The 5% rule for a home purchase | Features

ON THE MONEY: The 5% rule for a home purchase | Features

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Couples who are considering the purchase of a new home should consider whether it is better to rent or buy. One helpful way to make that comparison is by using what is typically the 5% rule (which is an oversimplification but a useful tool nonetheless).

We need to determine those expenses of buying a new home that you will not recover. These would include property taxes, maintenance costs, and what I would classify as lost opportunity costs.

Property taxes in South Carolina are typically lower than the national average and you can find out what your projected property will be before you plunk down any money to buy the home. State-wide, the average rate is .55%. Those taxes do not increase the value of your home and are thus non-recoverable.

For purposes of this comparison however, we will assume that…

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