This person seems to think renting a house is more beneficial than buying. Given the fact that I have already built up enough equity in my home to not only pay off the mortgage, but to take in cash the value of my mortgage (in other words, my house has doubled in value), I have to disagree in my case.
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5 replies on “Renting Is Better Than Buying”
Rent vs. Own
This guy is from San Francisco. This is not a place to compare property valuations and rental trends.
Opposite to California, the rest of the world’s rent is going up.
Also, he is comparing apples to oranges when he treats a $250,000 house the same as a $1000 rental. Aint no way, you can find a $250,000 house for $1000 a month. Pick one, if you want to spend a $1000 a month on a house, then buy a house that same size ($100,000, using the 1% rule that most rentors use, meaning if you want to make money renting a property, you need to charge at least 1% of the cost of the property). Now use the math and see what it says.
Also, most rentors keep up with the market, they aren’t in it to just give you a good deal.
Although, I do agree with his thought process that you need to think it through and that you need to choose what’s best for your situation.
For example, you can’t move from a house easily if you don’t like the area. Houses, do have a lot of costs associated with it besides the mortgage (property taxes, maintenance, replacement ie roof, etc). And remortgaging adds another financial factor that probably wasn’t calculated at the beginning. Also, if you only live in your home for a few years, you more than likely won’t financialy win out.
On the flip side, I think it is financially better if you are going to live in your home for the term of the mortgage. Also, the fact that it helps your credit score, gives you a more permament residence, and gives you equity you can utilize are factors that can’t be put into numbers.
Renting is an answer for people looking at the short term. Owning is something people look at when they are looking at the long term or when they realize that monetary savings are not the only thing they are working for.
Excellent points, Robert.
Robert – you are right the rest of the worlds rent is going up. I live in London and rent keeps going up as far as i am aware. Also house prices are always on the rise, thats why they are the one of the best forms of investment.
More and more folks are using a Home Equity Line of Credit (HELOC) as an interest cancellation account to accelerate their home equity and payoff their home *years* sooner than listed on their mortgage amortization schedule.
Unfortunately, today’s Real Estate market means that folks can no longer count on appreciation to build home equity. Those who realize that they need to pay down their current mortgage debt are looking for alternate ways to aggressively (yet safely) build equity.
And they’ve discovered a perfect online system to do that; they can focus on their wealth accumulation goals while accelerating their equity simply by using a Home Equity Line of Credit to ‘power’ the Money Merge Accountâ„¢ financial solutions program.
A typical 30 year loan (of whatever type) can be paid down in 1/3 to 1/2 the time — it’s a great way to save *huge* amounts of income by eliminating a mortgage amortization front-end interest load. (On a million-plus dollar home, I’ve personally seen where the Money Merge Accountâ„¢ program will save the homeowner $750,000 in interest charges!)
And the best thing – homeowners don’t have to refinance their existing mortgage or, in most cases, make any adjustments to their lifestyle.
It is unfortunate that most of us were never taught to follow three essential principles: (1) Avoid paying interest, whenever possible, (2) Use other people’s money, whenever possible and (3) Find and use a financial system that will guide you, especially if you have the tendency to go off-track. The Money Merge Account™ software and the program’s counselors use these principles to keep each homeowner focused on their wealth accumulation goals.
I’d be happy to provide further details…
Maybe where you live. In 2 years, my house as doubled in appreciation.