If you rent, you pay rent. If you own, you pay a mortgage. If you rent, your rent payment pays for your landlord’s mortgage, or it lines their pockets if the property is paid off. If you own, your mortgage payments contribute to your net worth as the principle is gradually paid down, and your equity (the amount of the value of the home you own) increases.
Critical Question #1
Is your rent paying you a portion back, or is it like a bottomless where you money goes, never to be heard from again?
In a rented space, any opportunity you may have to improve the space in which you live is limited to the permission afforded to you by the property manager or property owner. Even if all you want to do is upgrade your oven or change a wall color, unless you have permission, you’re stuck. Not to mention, who wants to invest in someone else’s property?
Hopeful Question #2
Do you want to create your own outdoor oasis? Oh, you rent? Tough luck. You own? Congratulations! You are the master of your own property. Do what you want! Make it your own, and relax on your own terms.
Did you know that Homeowner Average Net Worth is 3,600% Higher Than Renters? As surprising a number as that may seam, consider the details of why that is. Remember what happens to your rent money? It’s gone. All of it. Remember what happens when you make a mortgage payment? Every last penny of the principle portion of the payment results in reducing your debt, and increasing your equity. If the value of your home increases, guess who owns the increased value? You do! Author and self-made millionaire David Bach has said [see Millionaire Tells Millennials To Buy A Home],
“The fact is, you aren’t really in the game of building wealth until you own some real estate.”
Unless you have a good reason to rent (for example, you don’t plan to stay in one place for very long, you spend your efforts on other wealth-building avenues, or you just don’t want the responsibility of owning property), it’s worth considering the ramifications of watching your money descend into the bottomless pit rather than watching it contribute to your overall net worth.
What Is Your Priority?
Ultimately, the only fool is the one who acts without intention. If you rent with your eyes wide open, kudos to you! The odds are good that for most people, it just makes good long-term financial sense to become a homeowner.
Do you feel like a fool in the housing market? At Benchmark, we have experts who are ready to hold your hand through the confusion, like a guide safely guiding you toward the keys to your new home.
Find your Benchmark branch and contact them today to get started.Give us a call or contact us today. At Benchmark, we’ve got your back.Give me a call, send me an email, or request a call today. My team and I will take good care of you.
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