The real estate market is not going to be depressed forever, it will come back. I still think it is better to own then rent.
I know these are some tough times right now, not just in financial matters, but in decisions we need to make about the future, lately the future seems so uncertain. Here on Amelia Island we can see an enormous inventory of houses that have turned rentals.
I was having a conversation with a customer the other day and the subject of renting vs buying came up. Of course, I still maintain that owning is far better then renting. I want to share some of the conversation with you, it may help you in making your decisions.
We all know that the main reason for buying is the equity that you build up in your home. That is the money that you pay in the down payment and monthly in payments, you are actually paying down the balance on your mortgage. People have used the equity in their homes to establish lines of credit that can be used for other purchases or projects. I will admit that LOC’s today are few and far between, but I believe that in the future we will see some return of them. Next on my list is simply the pride of ownership. I have never liked having someone else tell me what I can and can’t do, especially where I live.
Another reason to own would be you are not making the landlord rich (well with rising taxes and premiums a little less these days). There are many real estate investors who have actually paid for properties without pulling one dime out of their pocket. They have had tenants who made the payments for them. While someone else was making their payments they would watch their bottom line, (net worth) increase.
Now, there is nothing wrong with this and I take my hat off to these investors who had the foresight to accomplish such wealth. My question would be, why don’t you consider doing the same thing? If not purchasing investment properties then the home you purchase for yourself is an investment and you should see it as such.
Owning real estate may not be for everyone. I have known people who would simply prefer to rent and not have to worry about major repairs, taxes and insurance, for them it is better to leave those issues to someone else. I won’t deny that those reasons don’t carry a certain amount of merit. I have also known people who have lived in a rental house for many years and loved every minute of it.
The real estate market is not going to be depressed forever, it will come back. I still think it is better to own then rent. The rental market today is flooded with homes available at very reasonable prices. As home sales have become more and more stagnant, many owners have put their properties on the rental market in hopes of having some income to help cover the monthly nut. There are many choices available on the rental market. I also submit that there are many good buys on the market today. If you can purchase a property today at below market price then I would suggest doing so. One day you will be able to cash in on the equity you have built up rather than look for another rental.