Renting vs. Owning a home which is better? Recently I seen some tweets and an article stating that renting was way better and less of a hassle. I for one strongly disagree for several reasons. Number one being money. Some say that a house has to many expenses and to hard to maintain, while renting you can just call your landlord to fix what ever breaks and every thing is cheaper. While yes you are responsible for the upkeep of your home I believe that when you are renting you are throwing your money away. Ok that may be harsh, you are at the least giving your money away instead of keeping it for yourself.
Let’s look at it this way. For ease of math let’s say you are paying $1,000 a month renting your home and you live there for 30 years. You just gave some one $360,000. After the 30 years you can continue to rent, paying that $1,000 a month, but in reality rents do increase so you will most likely be paying a lot more. Yes you can move and find a lower rent but over time it will go up.
Now let’s say you purchase a home and again for the ease of math you are paying a mortgage of $1,0000. At the end of the 30 years you have paid off this house. You can continue to live here and yes you will have to continue paying property tax but eh it’s no $1000 a month. Most important thing you do have is property which is more than likely worth quite a bit more than your buying price instead of giving someone $360,000 you more than likely have that much in equity now. You can borrow against it or sell it and use it towards a better home or retirement.
Want to know something else. While that rent did increase overtime if you were smart with your loan, your house payment didn’t increase. Some may say what about property taxes, I don’t want to pay that. What do you think you are paying when you pay rent? You are paying someone else’s property tax. When someone rents you a house or apt they figure in their mortgage, taxes, insurance, maintenance and finally a profit. Yes you are paying everything you would have if you owned your home plus giving them a little extra.
When I say home it can be a house or a condo, either way you are investing in your living space and your future. This is just one aspect to me that that says home ownership is much better than renting, and a simplistic view I know. No it will not always be easy, you have to do your research and be smart when purchasing your home. Bottom line though is that when owning your home, with each and every mortgage payment you make you are increasing the equity with in your home and thus improving your net worth rather than improving the net worth of someone else. Even in the recent downward slump in housing prices my house is still worth twice as much as what I original paid for it.
Whats your take? would you rather rent than own?
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