Rent v Buying a Home
Of course, a number of factors for example the local cost of rent compared to the local cost of ownership needs to be taken into consideration.
Choosing to rent v buying a home, is such a personal choice. There are pro's and con's for each. I'm going to help you by giving you a simple strategy and some points to ponder so that it makes a bit more sense.
When you Rent a Home:
Cons of Renting a Home
- You are paying off a mortgage - it's just someone else's.
- You don't actually settle down longterm - its not a permanent place of residence
- Your rental increases and that is beyond your control
- You are affected by rental increases and you may relocate often to stay within your budget
- Moving is one of the highest stressors in life
- Fear and uncertainty can affect everyone in a move
- You cannot make aesthetic changes to the property without permissions
- Restrictions and rules to live by
- No opportunity to claim tax deductions
- No returns on your monthly investment
- No capital growth therefore no opportunity for wealth creation
Pros of Renting a Home
- The property does not have to be maintained by you
- You are free to move depending on your lease
- Less costs involved in renting
- Renting may give you easier access to your choice of school district
- If property prices fluctuate it doesn't affect your decision to move or not
- No huge downpayment
Investing in a Home
A home is often the biggest investment and commitment people make, however purchasing a home is the first step to building familial wealth.
According to the Federal Reserve released in September, 2020, the net worth between homeowners versus renters was shocking. In 2019 the
The Survey of Consumer Finances, released in Sept. 2020 by the Federal Reserve, found the median U.S. household net worth is $121,700. However, the difference between the net worth of homeowners and renters was a very different picture.
When you pay your mortgage each month you are contributing to your own net worth. It's a form of saving, really.
When you rent - that becomes wasted money - no return on investment for the tenant, however the landlord has a growing asset.
If you would like to see the facts and figures as to how I can help you grow your wealth - let's set up a zoom call and I can share information with you.
Call or text me 704-651-9023 or email Susan@homecarolinas.com