What's The Difference Between Renting
Or Owning A Home in Minnesota?

There is a small tax benefit paid based on the monthly rent. But otherwise that money is simply gone.

When one owns their own home, that money goes towards their mortgage. The amount that someone pays out monthly is paid to the bank, where they got the mortgage and a portion of that pays off, the principal balance. So the money going out every month, contributes to earning equity from a long-term perspective.

On a more short-term basis for part of the mortgage that is not paying down principle is interest on the loan. That interest paid every month to the bank is tax deductible. So when April 15 rolls around, and you are a homeowner now not only do you get to take your regular tax deductions you get to deduct all interest paid on that long for the previous year. For most new homeowners, this is a very pleasant surprise!

For someone who is rented their entire life, they are not familiar with this benefit and think to themselves "what's the difference if I rent or own?".

Now, on the flip side, there are also cons to owning your own home. The first and most obvious is that you are now responsible for all maintenance and repair. Where as renters rely on the Association and Management to maintain grounds and the exterior of the building, as an owner that responsibility now lies with you. If you purchase a condominium, which is basically an apartment that you own everything in between the walls and ceiling and floor, the exterior of the building parking areas and all facilities will still be maintained by the Association and management.

However, you must pay a monthly Association fee for this to be done. In a single family home, all of those responsibilities fall to you. A town home will be somewhere in between, where some responsibilities fall on the homeowner and some are taken care of by the Association.

If you have pets or other special needs, you will want to consider whether a condominium or town home are appropriate for you as they will have certain restrictions such as pet number, pet size or breed restriction.