Renting vs Buying your home to live in.This is a major question you should be asking yourself, along with your spouse, your parents, and friends before making a decision to buy or rent the home you
Renting Vs Buying Your Home To Live In
This is a major question you should be asking yourself, along with your spouse, your parents, and friends before making a decision to buy or rent the home you live in, one of the biggest expenses and investments of your life.
You should buy if:
You’re comfortable with the downpayment and the payments per month.
You know you will live there for 3-5 years
You can’t deal with landlords or management companies.
You like to be able to renovate and be able to improve the home.
You’re in an appreciating market.
You can get reasonable financing like below 4-5%
You don’t know where you will be in 2 years
You don’t have a stable income
You’re in an unstable relationship
You don’t have the down payment
You have a good investment lined up where you could put your extra capital.
Know your numbers
How long do you plan to stay? Min 3-5 years, the more years makes it more sense to buy.
Look for calculators that include things like insurance, maintenance, home price appreciation and selling costs to paint an entire picture, like this one https://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html
In many cities the favor tips to buyers in as little as two years, while in more expensive cities it can take closer to 10 years. The golden rule is 3-5 years. Or buy a home that can be then turned into a rental or Airbnb.
Homeowners are 36-44 more X’s wealthier than renters depending on what website you look at.
When you buy, you forced yourself to save money. Renting you can blow it.
If you can find an investment that pays 8-10% consecutively, it might be better to put your money there rather than a down payment..
Owning a home creates stability for kids and families.
There is a tax advantage to owning a home, check with your local CPA
Homeownership makes people feel proud. Owning a home gives you the freedom to do whatever you like to it.
Owning a home is best for pets.
Here is why the last 5 years have been a good idea to buy real estate in Arizona
Sample Calculation for how you can make major money in Arizona just by putting a roof over your head!!
Here are some calculations on a median home price of Scottsdale AZ $479,000 (at the time of posting this blog) A sample of appreciation: (Results in the past 8 years have been amazing and not typical and most likely will not continue in this fashion. click here for website stats) House = $479,000 Down Payment typical Sample 10% = $47,900 5 year appreciation in AZ = 46.85% Home price in 5 years = $703,411 (2024) Home equity increase $703,411-479000 = $224,411 You just made$176,511.00!! An annualized return of 36.19% from your $47900 down payment. Paying your own rent, and paying your mortgage down at the same time with some tax savings on interest minus repairs and maintenance. This is just a general number with many more costs going into this, but read my blog below to get the full story of the appreciation Arizona has had in the past 8 years or so.
The Argument for Renting:
Grant Cardone believes you should rent your home and invest where the money makes sense, here are his calculations.
Down payments $18,000 (7.5% down with private mortgage insurance of $173.90 per month)
Bring to close $25,044 (closing fee’s etc)
The interest rate on a mortgage 5-6% ( He uses a higher interest rate then in today’s world)
Prop Taxes 2% per year (AZ is cheaper than this)
Mobility lost min 10-14 months
Suggests there are four million homes foreclosed on in 2010, which can be avoided by renting.
8% of all homes still underwater today total of 5M with negative equity.
Pay 7-8% per year with interest rates and taxes. And then an additional 5-6 % to sell the house with closing costs.
He suggests you rent, then take that money and invest into multi-family or investment homes where the rent to price ratio is better otherwise you may have to live in the hood.
He believes in mobility and lifestyle where renting you can be mobile and move. If you own, you are stuck there for 3-5 years min to make sense.
Jay grew up on a grain and cattle farm in Saskatchewan and started working at a very young age. He got into real estate at a young age buying his first property at 23. He's owned several businesses in....
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