Should you rent or buy?
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.
11 Responses to “ Should you rent or buy? ”
Leave a Reply
I made $7 million in 7 years™ … but, I started out $30,000 in debt.
Now, find out how you can get rich(er) quick(er) ... no scams, no schemes ... just good old fashioned financial advice! 
Luis on How to ruin your return by paying off principal …
Adrian on How to ruin your return by paying off principal …
traineeinvestor on How to ruin your return by paying off principal …
Money Beagle on How to ruin your return by paying off principal …
Ashton Fourie on How to ruin your return by paying off principal …
[...] a house to live in may not be the best financial decision in the strictest sense (but, still a sensible financial decision for most people) yet we often buy them for the emotional values: sense of ownership, stability, a [...]
[...] and blogosphere about this … ignore what you may have read: for most people, it’s the only way you will ever get financially [...]
[...] And, I am a firm believer that owning your own home is the START of your path to wealth. [...]
That’s the silliest thing I’ve ever heard – borrow against your house (aquire more debt) to invest??? Paying off your house early and being debt-free allows you to do whatever you want with your income, THAT’s truly the way to wealth.
@ Joy – If you didn’t like this post, I have some real doozies coming up in May that you will really hate
But, it’s true: paying off your home and then using that income to invest is ONE path to some SMALL ‘wealth’. But, then you are missing the power of leverage … stay tuned for more …
[...] actually, it was my 5th-ever post - some say that I should have stopped there – about the classic Rent or Buy dilemma for your own home … and, I just (!) received an interesting comment to that Post from [...]
[...] here is where I differ: for MOST people, it’s the only way that they will get financially free for lots of psychological/emotional reasons, more than strictly financial. Also, I do agree with [...]
[...] http://7million7years.com/2008/01/28/should-you-rent-or-buy/ [...]
[...] you simply may have little personal net worth and not much income, and as I said in this early post, owning your own home (for some) may be the only way you will ever get ahead [...]
[...] http://7million7years.com/2008/01/28/should-you-rent-or-buy/ [...]
[...] your first home, and using that as a springboard into other investments, is a great way to go; just remember what I said, way back in the beginning of 2008: If you are ready, willing and able to buy your first house, or you are thinking of trading up [...]