Renting vs Selling

 Renters may sometimes be unsure if making a large housing investment is the right thing for them, especially when they're considering a long-term view. 

An alternative to rent, but which sometimes pushes renters to ask themselves whether it makes sense, is purchasing. Buy is most beneficial, particularly when taken for a longer period. 

Renting Advantages:  Renting may be beneficial depending on where you're from. The primary benefit is your monthly payment is going to be lower than the need for a mortgage. A second advantage is you have the task of maintaining the property and paying for all its upkeep. Yet, those factors provide more benefits to consider when renting than buying. 

Renting Disadvantages:  Renting's negative consequences are substantial. So staying true to your gut instinct, in the event that you have any chance for ownership of an asset such as a house or condo, it's generally a better investment to forgo renting. 

You lose value when you rent, because you don't have to accrue real estate worth while you're in the rental. Suppose you lease a spot for 1,000 dollars a month and live in the house for two years. During that time, you would lose $24,000 in pure rent. The $24,000 you'd lose would go completely on the things you had to accommodate while in the home. Compare this to what the landlord collects. 

Rental payments closely emulate a landlord's mortgage interest rate applying the previous example. Please see Step 1. If your monthly rent costs $1,000, then when taking the previous set of values into consideration, the principal balance of your mortgage owed to the landlord will be precisely the same as your mortgage balance. For the next two years, you saw your landlord build equity because they paid down the principal balance on your mortgage. Additionally, the landlord earned a hundred times Google Drive when they bought their home.  

By appreciation, I simply mean a rise in home value. If a rental appreciated $20,000 in two years, the property owner has received a windfall. They were able to make a profit of $24,000 and gain additional cash flows by reducing their debt. As a tenant, you have made this all possible. The homeowner most likely wants to thank you.  

You should be out shopping for your own home if you're renting, as renting is only making money work for you, not a landlord. 

Homeownership is still a great thing.