Why is it Smarter to buy than Rent? The Rent vs. Buy Decision!
Rent vs. Buy, this has been a big question since I began my real estate career in 1986. Home buyers are not buying a just place to live they are building a future. Home ownership builds wealth in two ways: Appreciation and forced savings. Owning a home comes with benefits that renting does not. We have already discussed building wealth through appreciation but also the ability to write off interest on your mortgage and property taxes. In a survey by the Federal Reserve they have consistently found a vast gap between the wealth created and accumulated by home owners and renters. This gap spans all income levels: homeowners making above $80,000 have an average of $451,000 in assets and renters have assets of $87,000. Even those home owners making under $16,000 have assets of $73,000 and renters a paltry $500.
Those home buyers waiting for prices to decline further may be waiting for a long time and miss the opportunity. Prices are already starting to increase for homes in Stockton and Lodi California. The problem in the last real estate boom was that many home buyers waited till they saw the market shooting up like a bottle rocket on the 4th of July and then jumped in only to suffer with the collapse of the real estate market. Those who bought their home earlier when price were reasonable are now in a great position.
Home owner are most likely to realize the advantage of owning a home rather than renting by observing the following keys to profitable home ownership:
· Plan to stay in your home for at least three years or more. The longer you own the better.
· Manage your money. Make sure your financial house is in order.
· Don’t buy a house that takes every penny you have. Remember life is to be enjoyed, vacations, going out to dinner are important so don’t let a house become a burden.
· Update and maintain your home, when you go to sell the value will be there and you won’t have costly repairs at the end.
There are all kinds of Rent vs. Buy calculators but most of them don’t consider appreciation and wealth accumulation. We have been working with home buyers since 1986 and helped many of them realize profitable home ownership in Stockton and Lodi. Call us at 209-479-9222 or visit us at www.hughlilly.com for a no obligation consultation