Unless you plan to live like a groupie following a band on their world tour, as you go through the stages of life and adulthood you will eventually ask yourself the question: buy or rent?
Many people think that renting is the no-brainer option: you have a landlord to unclog the plumbing for you and to do various dirty work necessary to maintain a habitable environment, it’s flexible enough that you only need to commit to a yearly lease, and a real estate property bubble has been one of the major causes of the financial recession of 2008. That’s a lot of things to hate about real estate.
On the other hand, rents are projected to rise by more than 4% year-on-year, while house prices are expected to reflect the recovering economy by rising too, making them good investments. If the economic crises we have been experiencing taught us anything, it’s always to look at the long-term. No more bursting bubbles.
Here are a few other reasons why owning real estate property will be good for the you now and for the you in the future:
- It’s cheaper (in the long-term). To be clear, when you know that you are going to be in an area for longer than a year, it would be cheaper to buy than to rent. Money that could have been spent building the value of a property that you could sell off in the future instead went to your landlord. Your landlord probably knows the advantages of real estate property ownership from your monthly payments.
- Speaking of landlords, it has the potential to be passive income. If at any point in time you need to have extra money come in, having real estate property to rent out would be a good safety net.
- Having property as collateral for loans. Specifically, for dire financial needs or for a ready source of capital for a sure-fire business idea, you can use your home as collateral using a home equity loan.
- Mortgage rates are at an all-time low. As the economy recovers, people now are more able than last year to think about owning their own property. With mortgage rates falling to percentages as low as 2.61%, now would be a good time to purchase if you have been considering it.
Aside from the financial advantages of having your own real estate property, isn’t a great feeling being able to attach anything on the walls and do whatever you want to the fixtures without fearing for your security deposit?
For exact details on at what point buying will be better than renting, there’s a very useful buy vs. rent calculator over at the New York Times and over at Yahoo as well.