BUYING Vs. RENTING a home: Which one is REALLY better? | The truth about REAL ESTATE in 2021
According to Elon Musk, the founder of tesla, I am selling almost all physical possessions will own no house interesting, so Elon Musk actually listed all his properties on Zillow for a whopping 137 million dollars.
I wonder what that’s, trying to tell us about owning a home so for most people owning a home, it’s, going to be one of the most expensive purchases they’ll ever make in their entire life. After all, owning a home is like, basically, the typical American dream right.
Almost everybody wants to be a homeowner, however, owning a home can actually be a huge liability instead of actually an asset. So, if owning that property is not putting money in your pocket, it’s. A liability I’m Sorry, a lot of people think that owning a home is an asset, but if it’s, not bringing in that money, nope it’s. A liability in fact. Try not paying your mortgage for three months and see what happens.
Oops horrible advice, don’t, do that at all here’s, a fun fact. The Latin word, Mort, actually means death and the Latin word gedge actually means pledge. So if you put that together, it means death pledge.
This is where you pledge to pay up your mortgage until the day you die basically – and this is why your home is considered an actual liability and not an asset, because you have to pledge to pay that loan, and it’s.
Taking money out of your pocket instead of putting money in your pocket now when it comes down to renting a lot of people, believe that renting is just simply a waste of time, you’re, actually paying someone else’s mortgage in Other words, you’re, making somebody else rich, because not only are you paying their mortgage, but you’re, giving them that extra bonus on top of that mortgage, because, of course no sensible landlord will charge you 500 for rent.
If they know that the mortgage is 500., so as you can see, they’re, basically, making a profit every single month. Today, we’re, actually, gonna look at renting versus buying a home, which one’s better. Now we’re going to start off by looking at the pros for renting now.
One positive as it relates to renting, instead of buying a home, is that it is actually cheaper in the short term notice. I said short term because if you decide to rent for the long term, it’s, not gonna work out right, however, renting for the short term can actually be cheaper than purchasing a home for the short term.
When you’re a renter, you have the flexibility to move anywhere in this world of your choice at any time. Well, wait when, once your lease is up okay and a lot of times, even when you do have a lease, you can actually buy out your lease, you can actually find ways to get out of it with just a little extra money.
If you choose to not go that route, all you got to do is just wait until your lease is up, and you can move anywhere in this world. You can go to Cancún, bora, bora, Hawaii, Mexico. You can live anywhere of your choice, and it’s, so much easier to move when you’re a renter, another pro when you’re renting.
Is you’re, not really responsible for anything? So if your dishwasher breaks down or your sink gets clogged, listen, all you got ta do is pick up your phone and ring your landlord. That’s. It y ‘
All need to come and fix my washer, because it hasn’t been working for the past two days. What you’re, saying that I’m gonna, have to wait for three whole days. Are you kidding me? No, I’m, not resigning.
This lease I’m. Sorry, since your landlord is basically responsible for everything. The only thing that you really have to focus on is just being on time with your monthly rent, and that’s. It now, let’s, jump right into the cons, as it relates to being a renter now renting for the long term.
It can actually turn out to be extremely, extremely expensive. If you’re renting for over a five-year period, less than a five-year period, I would highly suggest renting instead of purchasing another con is the huge upfront deposit that is required when you first move in to a new place.
A lot of times this includes your first month’s, rent your security deposit and your last month’s rent. So, if your monthly rent is fifteen hundred dollars, you’re. Looking at an upfront cost of four thousand five hundred dollars just to move in to that property, so, as you can see, the upfront cost for deposits can be extremely expensive.
Another con, as it relates to renting versus buying, is that your landlord can pretty much raise the rent at any time. Once your lease has ended, and you’re ready to resign your lease, they will let you know how much your rent will actually be.
I know in some states there’s, not, a law that tells landlords how much they can actually raise their rent to. So if the landlord wants to raise the rent 300 next month at the end of the lease, they have the flexibility to do that in some states, just as how they can actually raise their rent at any time.
They can also give you notice at any time. So, as a renter, you’re, not always going to feel that sense of stability that you might be looking for. Another con as it relates to renting is that you cannot always just modify the place as you want.
I know for some people they might make changes, but as soon as their lease is up, and they’re moving, then they will actually put the place back exactly as it was before, or else they will take that deposit, and you won’t be refunded so not being able to make whatever modifications with less stress that’s, another con as it relates to renting a apartment or a house.
So now we’re going to jump right into the pros, as it relates to buying a house instead of renting one, proof. Buying instead of renting is of course appreciation. There is a high possibility that the value of your home will appreciate, which means it will go up in value.
So, whenever you’re ready to sell your property in a few years down the line, you will actually gain a very, very large chunk of change from selling that property another pro for buying instead of renting is you can make whatever modifications you need.
So if tomorrow you wake up – and you get this brilliant idea to paint the ceilings purple, you can paint the ceilings purple. My dear it’s, yours ain’t. Nobody going to take your deposit for painting the ceilings purple.
Another pro for buying, instead of renting, is actually the stability that you have. You feel stable. You feel secure. Likewise, you feel like that place where you’re at is yours right. Hopefully, you are able to keep up with your mortgage in order to feel that sense of stability, because if you don’t – and you’re, not up to date with your mortgage payments, they will kick your butt out.
Just the same. So is buying better than renting, because at the end of the day, if you don’t make those payments you’re going to get kicked out either way. Now let’s say that you ‘ Ve been shopping around for a home, and you see a house listed for 300 000 right and your plan is to put 20 down just to avoid paying PMI private mortgage insurance.
That’s. Going to be an upfront cost of 60,000, not to mention the other legal fees, the home inspection and all that good stuff that comes with purchasing a home, so that’s, just a fraction of the cost to purchase a home.
That sounds way more expensive than renting for sure another con for buying instead of renting, is that there’s, no landlord to call and say hey. My AC is not working, come and fix this thing. Nuh uh it doesn’t work like that.
When you’re a homeowner, you have to ensure that you have money saved up and set aside just for home maintenance and repairs. So if anything happens or if anything breaks that’s on your shoulder, that’s on you, you are responsible for that and fixing that no landlord to call okay another con as it relates to buying versus renting, is that you might Not have the mobility that you need.
You can’t just get up tomorrow morning and be like you know what I’m going to move to Hawaii that doesn’t exist. Unless you’re, going to maybe rent out that current property, you can’t just get up and move whenever you wish.
So you have to ensure that when you’re purchasing a home, you will be living there for at least a minimum of five to ten years, because that’s. How you get the value for your money when you’re there for the long term, so, as you can see, when it comes to renting versus buying a home, I can ‘
T really give you a set answer to say: renting is better or buying is better because it just depends on your personal circumstances. Do you have good credit score? Will you be in the same location for at least five to ten years? Do you love your job and see yourself working in that same job around that same location for at least five to ten years? These are questions that you’re going to have to ask yourself, and if the answers to those questions is a big.
Yes, then, it might be a better option for you to purchase. If the answers to those questions is a big, no, then you might need to hold off and rent for the short term. You also want to consider. Can you actually afford to purchase a home because, as I mentioned before, putting down twenty percent is so much better than putting the bare minimum three point: five percent, because with a bigger down payment, you end up saving so much money in the long term?
You also need to ask yourself: am I able to put down a small amount of money aside for maintenance or repairs, like any emergency or unexpected expenses? You need to consider. Do you like freedom, or do you like stability? So again, those are the things you might want to take into consideration before you make that big, life-changing decision.
So now I want to hear from you, which do you think is actually better renting or buying a home, comment below in the comment section. I would love to hear from all of you guys.