Are you thinking if you should purchase a home? Maybe, or maybe it isn’t the right decision at the right moment. Many factors go into this, but many people fail to realize the financial benefit of purchasing a home.
Paying the mortgage is just one expense, the owner of a home also has to maintain plumbing, paint on the walls, the floors, you understand. There are a ton of additional expenses in addition to the mortgage to account for, and the more dated a property is, the higher those expenses can become.
However, there are many parts in our region where it more expensive to rent than to own. For example, where I grew up, I could buy a nice single family home for approx. $300,000, which the mortgage ends up being around $1500 per month, with additional expenses considered. The same home could rent for about $2,500 per month. So, would the homeowner of a $300,000 house have $1000 in home-related expenditures every month? That shouldn’t be the case, unless they made a poor investment on a bad property.
Although this may make sense where I live and in most areas across the US, it may not make sense where you live. It is good to do your research on home price vs rent in your area to make the right decision.
There are many people out there that believe that buying a home makes you immobile. Is this really true? I think not. Sure, mobility when your young is fun. Living in the back seat of your car, sleeping on a friends couch, eating microwaveable food you rummaged from the freezer. Does this really sound fun? In the time we might think so.
But then, as the natural order of things we get older. We start being held responsible for things in our life. We begin to feel the need for stability. We start thinking about our relationships, and one day starting a family. We decide that the American dream may be something we actually want out of life. We also want to create lasting friendships that don’t happen when moving city to city.
When you purchase a home, think of it as an investment. After owning it for several years, you can begin to slowly renovate areas of your home that are becoming out of date. In doing so, you can add thousands of dollars to the value of the property. Making your home a more desired place to live in your neighborhood for someone willing to rent. If you find the right tenant at the right asking price, you could be making enough money to cover your monthly mortgage and then some. This extra money will help give you many other options to live where you please. Making you mobile, while getting return on your investment. How does that sound?
Many bloggers like to argue that home prices climb at a slower slower than stocks. If your blinded by numbers this might be true, but not if you really understand the big picture.
As a winner of the Nobel prize and famed Economist Robert Shiller mentioned, using the S&P/Case-Shiller Index, home prices in the past 100 years have gone up, on average, at the same exact rate as inflation: 3 percent.
You may still be wondering wether or not you should buy a house. For most individuals, it can be a great investment. But that is for you to decide if it is right for you.
But, if you make your decision based on a blogger telling you that “only suckers by homes,” we need to have a conversation. You should look for an investment that grants you the right to make your own choices and give you freedom to do what you want with it. When you decide to rent a house, you lose a large portion of freedom of decision making to the owner. With you money going directly to them, your fueling their potential investment opportunities.
On the other hand, when you own your own home, nobody can decide what you do with your home. (unless you live in a community with HAO) You can build onto it, paint it, give it landscaping, etc. You also won’t be forced to move your out leaving your children to go to another, less desirable, school district. This among many other factors are reasons owning a home is better.
As a real estate entrepreneur, I’d prefer if you continued to rent because this will allow me to continue to build my wealth and abundance of investment properties. But as a fellow human being, Im telling you that you are not making a good investment by renting.
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Premier Property Pros.