Own your Home or Rent? Why not both?
A recent story on CNBC has revealed what many in the real estate business know already - that owning a home doesn't make you any wealthier - and that renting and reinvesting your money instead would give you a better chance at growing your wealth.
Well, I just have one thing to say to that : " No duh!" You see - what a lot of people don't seem to get is that a home is liability - not an asset. Whats the difference?
A liability is something that costs you money - like a house payment. Your mortgage costs money every single month and unless you are collecting any income for the property - then you have yourself a liability.
An asset on the other hand is something that returns money back to you -like a house that you have rented to someone that pays you every month.
Why I prefer owning my own home vs renting
The decision to purchase a home is very personal one that many people eventually come to terms with. For some, the “American Dream” as it is often called, is everything they hoped it would be. For others, however, it is not always so dreamy and for some can even be a nightmare. We have all grown up believing that someday we grow up and buy a big house with a nice yard and and that was all there was to it. Somewhere down the road though, we realized all the responsibilities that come along with home ownership. We hear horror stories about plumbing disasters and flooded living rooms. We picture people scrambling to make the payments each month and always on the verge of losing their home. This is simply a skewed version of how things really play out. That is not to say that owning a house is a bad thing - I prefer to own my home, but I have found a way to turn it into an asset instead of a liability - I also rent it out.
Personally, I prefer owning my own home vs renting. But I hear a lot of people talk about why they would rather rent. I can understand not wanting to take on the responsibility of a home – but I have to tell you – some of the reasons I hear just don't hold water - at least as far as I m concerned .
The added responsibility also come with the opportunity for additional income. You can build equity in your home, which you can then use to invest in additional rental properties. I like being responsible for my own property - I never have to wait for a landlord to fix anything or to do crappy work to save money. Because I anticipate maintenance issues, I put a little aside and have home project credit cards for emergencies. My expenses are tax deductible and so is the interest I pay on the mortgage.
Some of the reasons cited for not wanting to own a home are as follows:
Have to save up too much for a down payment
Too many home repair headaches
I don't want to stay on one place for 30 years
Owning a home means I'm responsible for every little thing that goes wrong
Let me address some of these concerns
These seem to be among the most common excuses I hear when people discuss the challenges with owning their own home so lets talk a little bit about what each one really means and why I don't think it is really that big of an issue. Keep in mind that these are my opinions only ad it is up to each person to decide what make most sense for their long and short term goals and financial objectives.
Saving up for a down payment can be a struggle , but it can also help you to learn to live with less and to help you to prioritize your finances. Saving for a home requires planning, sacrifice, and patience - even if you don't use the money for a house , you will at least have it available for emergencies or other investment opportunities. It never hurts to put money away for a rainy day.
Home repair headaches can be mitigated by doing a good home inspection to be sure that you are getting a solid home. During the inspection , you can determine the age of the roof , the HVAC ( heating & cooling) system, the condition of the foundation, and the age and condition of any of the appliances. Then you purchase a home warranty to cover those things if they have problems and you are covered from future headaches.
Don't want to strapped down to a 30 year mortgage? Get a 15 year mortgage instead - and pay much less interest over the years. No one says that you have to live in the house forever. If you decide to move out of town or would like to travel for a season or two then simply rent out your house while you are away. If you don't want to rent it out for long term, then you can always do short term rentals like airBnB so you can earn money while your away from your home and still have someplace to come back to.
Responsibility - yes - you are responsible for things that take place in your home. Sometimes things happen and you must take care of them - but most times, if it is not big enough to make an insurance claim for than it is not big deal. You have to take care of your yard - or you could let it go to crap - it's your home , so it's your choice. Being responsible for where you live is called being an adult and if you can't handle that then I'm not going to go into the details of why adults need to act responsible.
So the reasons I have seen against home ownership don't seem like strong enough reasons to me to keep handing my money over to a landlord. I would rather use my money to build equity in my home - because every payment I make means a little more of that house belongs to me
But, the #1 reason I prefer owning to renting is that I cannot bear the thought of throwing my money away into a black hole every month to someone else who is using it to pay their own mortgage and build their own equity. You are never going to see your rent money ever again - even if Iose 50% equity in my home , I will still have something that I can take out of it - with a rental - the only money you can ever hope to recover is your deposit - and even that is a long shot.
Still .. I agree with that owning a home is a liability and not an asset -
That's why I believe that you should have your ducks in a row and have other assets / investment before buying a home - even then - consider buying a multifamily property that you can rent a part of. That's why I own rentals. My first home was a duplex and I lived in one side and rented out the other.
I get that owning is not for everybody - but honestly, the amount of work / responsibilities of owning a home is sooooooooooooo worth it - I rarely have issues. When they happen they are not really a big deal - I'd rather have to pay for an appliance repair every now and then vs living in someone else's building who can tell me what, when and how I can improve my house/yard while taking my hard earned money for himself. The breaking point for me was a landlord telling me I had to get rid of my dog - I don't get rid of my dog for nobody. so I bought a house. For my dog. I subletted my apartment and bought a duplex that I rented 1/2 of to somebody for a few years before selling the house and doubling my money.
So think about the reasons why you are not buying a house and ask yourself if you could benefit from owing some equity and growing your portfolio with real estate that can grow in value and produce income for you.
Please be sure to check out my others articles on real estate, investing , and cryptocurrency ( and some other random dog stuff)
I always upvote comments to my blog posts
buy of course !
This post received a 91% upvote from @morwhale team thanks to @jorlauski! For more information, click here! , TeamMorocco! .
Choosing between owning a home or renting doesn't have to be a dilemma. Consider luxury home rental options for a flexible and high-end living experience. Renting a luxury home allows you to enjoy upscale amenities and prime locations without the long-term commitment of ownership. It’s a fantastic way to live in style while keeping your options open for future decisions. Whether you’re relocating, exploring new areas, or simply seeking a change, luxury home rental offers a versatile and attractive solution for modern living.
I prefer to own my own house first, then I'll consider investing in a property and sublet it.
I get why some people prefer renting—it’s less hassle—but for me, I couldn’t handle the idea of using my rent money to pay off someone else’s mortgage. Owning my own place gives me more freedom, even if it means dealing with repairs now and then. I’d rather have that control than have a landlord telling me what I can or can’t do in my home. If you’re thinking about buying and maybe renting out part of your place, take a look at axonproperties.ca. It’s been a good way for me to build equity while keeping things flexible.