Why Own When You Could Rent? What???

in #life5 years ago (edited)

Have you really reconsidered all of the pros and cons of the two options? One thing is sure: you need a place to live in. While owning may be more beneficial for others, does it mean renting is less beneficial for you? Before you come to a conclusion, you really need to look at all the evidence compiled especially for you:

Benefits Of Owning: 1. You are the landlord and can fully enjoy your property without limitations. Nobody tells you how to use your property; nobody tells you how many people can live in your property; nobody visits you to collect rental checks every month, and so you can enjoy total privacy; you can remodel the house the way you want it, too. 2. Your equity builds during the time of mortgage repayment, which means more money accrues in your wallet. 3. You can deduct certain expenses, like mortgage related costs, real estate taxes, costs of house improvements from your income taxes. 4. You can take advantage of the transfer tax waiver (=lower closing costs) or capital gain deferral (=lower income tax) when moving between houses, under certain circumstances. 5. You can lower your home expenses by applying for a variety of real estate discounts. 6. Once your mortgage is paid off, your monthly house expenses are further reduced. 7. Now, you have collected as much as 100% of your property's value. And this means you have a substantial legacy to leave your heirs.

Benefits of Renting: 1. You can freely-enough use the property without having to maintain it. All the landscaping, snowplowing, roof fixing, appliance repairing etc. shifts to the owner. 2. You might be able to put away some money while paying rent even though you don't have any equity in your rent. 3. You don't have any substantial housekeeping related expenses. 4. Your moving flexibility gains high scores. You, under most circumstances, need only a month's notice to move out. 5. You might be qualified for rental assistance, under some circumstances. 6. You could buy a property for the cash you were saving while renting, which means your monthly expenses could be dramatically reduced. 7. And, you could, too, have the 100% ownership right to your property-something to pass to your heirs.

Hopefully, you know where you stand now. Renting, as it turns out, is not really such a bad option…as long as you are in control of your finances. Unless at the end of the month you find yourself with few dollars put by, there are really high chances of you being able to acquire the full benefits of home ownership one day. But, if you hardly manage to save money on a regular basis, you might be better off with a mortgage that not only allows you to gain proprietary rights sooner but also to save money. You are saving money when building your equity, but you are not getting any return when paying your monthly rental fees. Imagine yourself acquiring a real property for approx. $120,000.00, which puts you, nowadays, in a 2-bed condominium, in some areas. You pay not more than $6,000.00 down at closing, plus some closing fees, and afterwards you pay only $1,200.00/month, taxes and association fees included.* Is it not what you are currently paying in your rent? Sure, at the end of the 30 year period you will have paid a little over $214,000.00 in total mortgage, but do you think the same condo will cost less than that in 30 years’ time? And, do you think you will have cash, 30 years from now, after having been paying $1,200 a month to your landlord? I know it is not going to be you; the only beneficiary in your rental situation is going to be the person you were paying the money all along.

*The purchase price and monthly payments are based on the following criteria:

LTV:95%; PMI:1%, APR:4.8%; Term of Loan: 30YRS; RE Taxes: $3,000.00; HOA fees; $250.00/month; Purchase Price: $119,391.00



I live by the triple F rule . The FFF rule states if it Flies , Floats , or Fu*** you rent it.

You might be able to put away some money while paying rent even though you don't have any equity in your rent.

How does this figure? The only case where this would be a thing is if your rental payment is less than a mortgage payment would be for that property, which (especially these days) is not typical. It doesn't even make sense when you think about it: the landlord needs to pay their mortgage, plus costs for maintenance, plus profit. The primary barrier to buying is down payment and closing costs, which is why renting is only better if you're moving around a lot (more than once every 5 years or so).

You must keep in mind that when somebody rents their home out they probably bought it years before when prices where cheaper, or, additionally, they pay higher down payments, if they don't buy for cash, so this is why their payments are lower than what the lessee needs to pay. This is why the renting money covers their mortgage, which in the end is paid off sooner.