Should you own or rent? I have seen a lot of rubbish written on this subject … stuff like “renting is just dead money” or “a house is a liability” … so let me set you straight:
If you are just starting out, up to your eyeballs in debt, unemployed, or you just can’t afford a house right now, it’s simple: you just rent.
If you already own a house, don’t sweat it, keep owning.
And, if you are ready, willing and able to buy your first house, or you are thinking of trading up (or, down) …. here’s my advice:
Put aside the emotional decisions and just consider the financial impact, and that is: your house is the ONLY way that most people will ever get off the launching pad to financial success …
Why? Because, you are building up equity over time (even a flat or falling real estate market eventually climbs back up again) …
… but – and here is the key – ONLY if you are prepared to put the equity in your house to work for you … that means, borrowing against the equity in your house to INVEST.
Now, if you are buying a house with 10% – 20% down, this won’t be until you pay it down a little and the market picks up a little.
But, when you do build up enough equity in your house to borrow against, you’d better be prepared to do it! If not, then you are FAR better off just renting and investing the money you save on mortgage payments every month …
… if you’re not prepared to even do that, stop reading this blog … you will never be much better off than broke.