I think we can all agree on one thing: It’s nice to have a home YOU OWN and renting feels like throwing money down the drain.
Lets look past the desire of attaining the American dream and having a home to ourselves and think about the rising costs of owning a home.
Home ownership definitely has advantages, but consider this: a buyer has to tie up 20% of the purchase price. That’s a lot of cost opportunity tied up that could be used to earn a return on something with a higher ROI than owning a property.
A house that costs $300,000 would, on the lower end of the cost spectrum, have a annual tax expenditure of around $5000. Add in your principal and interest payment each month. Interest rates will continue to climb as well! Don’t forget about the rising costs of material at Home Depot and Lowe’s. You will have all kinds of items you will need to purchase as these stores to maintain your home. Throw in labor costs unless you are a DIY type person.
What if you took the money you were going to spend on a home purchase and put it into an investment that gained you a higher ROI than owning a home? Would you do it?
Don’t get me wrong, I would much rather own a home than rent even if I could get a better ROI somewhere else, but I’m sharing this information to open up a new door in your mind: you can actually benefit more (IN SOME CASES – NOT ALL) renting and putting your cash to work in a high yield investment versus owning a home.
What are your thoughts? Agree, disagree? My thoughts: I still want my home! I used to feel like I was throwing away money giving it to someone else for rent! Too bad renting isn’t a complete tax write off or everyone would be renting!
If you want to read the pros and cons of renting, check out this great post: