Last week I shared why I felt that real estate isn’t the greatest investment. Once I was finished with the article I realized that I a lot more left to cover as it pertains to real estate. Today I wanted to address some of the common misconceptions that young people believe when it comes to real estate:
Renting is throwing money away.
Just because you rent it doesn’t mean that you’re “throwing money away.” You’re paying money to have a shelter for you to live in. Are you throwing money away when you eat food? This axiom that views renting as a “waste” needs to be challenged. Your home base shouldn’t be considered throwing money away.
Throwing money away is when you buy more home than you can afford, when you move out of your house before you’re ready, or when you put down a very small down payment on a large mortgage. Don’t ever let anyone make you feel bad about renting. Generally speaking, the difference between renting and owning can be a couple of hundred dollars a month. I’m sure you could find a way to invest that money.
Real estate always appreciates.
There’s no guarantee that your property will always go up in value. Anything can happen to the area as a whole. We all know that real estate is all about location, location, and location. The location of your piece of real estate will determine whether it goes up or down in value. There’s no hard fast rule dictating that your property will go up X amount in value over X amount of time. Read More…
With current house prices at record lows i find it rediculous for anyone to consider renting. Banks are so desperate to sign up new homeowners that you can get a really big house in a shiny new neighborhood for well below market value. I’m living a 2-month old 5 bedroom suburban home with envy from all of my friends.
I helped finance my daughters condo last year when she left for college. I felt it is more beneficial than renting and it helps her build credit history.
Right now there are million dollar homes in the U.S. selling for $150,000. I am going house hunting next week.
Buy low, Sell high.
Renting isn’t throwing money away. If you plan on renting for less than 5 years it is actually more beneficial financially than to buy a home.
Check this interesting article with an INFOGRAPHIC: http://www.moolanomy.com/2697/is-it-better-to-buy-or-rent-infographic-mmarquit01/