This is an immensely interesting and important topic to ponder upon. In my opinion, one should look at the entire proposition as a mathematical evaluation for time value of money. For illustration, if someone takes all the money he has and buys a house with it, then he is putting a lot of money in it and selling the same in say 40 years he gets some profit, but if he puts the same money in a high return mutual fund, he gets 3 times as much as profit in the same time frame of 40 years. So in my opinion one has to weigh all disposable options before taking a call on investment. Down below is the detail discussion of the topic by RealEstateCake.
Let us address the issue with examples. For instance, you sublet an apartment with a starting rent of $1350 and this increases at 2–3 % each year. The apartment’s rent at 5% came close to $2500. So practically you end up paying almost $1200 more each month for housing. So then you buy a 3 bedroom apartment, enough space for the kids at almost double square footage of the apartment. You are ecstatic as all your money went now for payment on your own property. And of course you could save any extra money to invest it on the stock market. RealEstateCake helps you solve these issues like a piece of cake. It helps you evaluate the options and thinks in the best interest of their clients.
Not to mention the pros of living in comfort and abundance of space or usually smaller and more Spartan rental. Another big thing, the maintenance of the house presents an opportunity, if the owner is inclined to do the repairs / labor himself the costs would be just a fraction of what have been paid to a contractor and a percentage of the improvements go to increase the price of the home.
Again everybody’s situation is different , if the person is a sound investor , and not inconvenienced to rent a small space, if they like it and have the financial discipline not to spend or lose the accumulated funds , or if they have to often relocate , yes renting may as well be the better or the best solution .
While a mortgage payment might be less than comparable rent, endorse ownership is rife with unexpected costs. You can wake up one morning and suddenly discover you have a $8000 bill to repair the roof.
And if you want to move, owning a home is a major complication, especially if the housing market goes down. I wouldn’t purchase one until you were sure you would be living in the area for a long time. And while you decide to purchase an apartment RealEstateCake is the one stop destination. At RealEstateCake, you can get varieties eye catching deals for buying your dream home.
When you buy your own apartment you are paying yourself instead of a landlord. $15000 is flushed down the toilet as rent of just a year. If you own a house a lot of that will go to the bank, but thousands each year go into your equity, and is money you can get out of the house later.
If you have a home office required for your business—meaning it produces income, and you do not have an office at another place of work—all sorts of things become tax deductible, including the portion of the mortgage that pays for that space. This can be a major financial benefit. So for self employed people who work out of the home, home ownership is a really good financial move. And with COVID round the corner work from home is the now normal!
In my opinion, you’re paying rent on the one hand and mortgage on the other. Figure in house maintenance expenses and the house won’t wind up any cheaper than becoming a tenant, so there is no more free money to invest. The difference is that you will be getting some of that rent back, and if housing values go up over time, as they often do, you could make a nice profit without lifting a finger. But you have to be careful about that. There are people who bought a house when the market was at its peak, and when they needed to move, it had lost value. They lost about $12,000 in the move. So the state of the housing market and interest rates when you purchase determine how good an investment a house really is.
The main advantage to home ownership is not just financial. It is that the space is yours. You can have whatever pets you want, build a deck, attach things to the walls—hell, tear down the walls if you want— and make the space yours in a way a rental can never be. For people with big dogs it may be a practical necessity, as so few landlords will allow them.
Home ownership can be wonderful, but it’s not for everyone to enjoy. As they say with great fun comes greater responsibility!
In other words, the one spot on a side of the house where the entire weight of two stories had to be supported, had rotted on the top and been cut away on the bottom. That side of the house was actually starting to sink, causing the damage.
If this happens to your owned house, you will lose nights worth of sleep. You can’t even envision the nightmare that would have resulted if you had not caught it in time, as there would come a point where support was no longer sufficient to hold that side of the house up. And you know what? Insurance doesn’t cover damage from long-term wood rot.
But that is the joy of being a homeowner—that any day, without warning, a major problem like that could be discovered, that you can’t put off and do later. Figure that in when you are deciding what you can afford. Having a nice house but being cash poor is a bad situation.