Renting Or Owning

Which Is Better, Renting Or Owning

Should I be Renting Or Owning My Next Home?

There is a huge amount of debate about this question that gets asked over and over. Ironically for most people who are asking the question of renting or owning, they have already made their choice and are just asking for verification that they have made the correct choice. In all honesty, there isn’t a black and white, right or wrong answer that is going to satisfy everyone.

renting or owning

Does Renting Or Owning Save More Money?

rentingIf you are renting some lower end housing, you could conceivably get into a situation where it makes more sense to buy than it does to rent. Let me give you an example. If you pay a thousand dollars a month for renting a property that has a sale value of 250,000, you are barely covering all of the costs that the owner will be incurring by owning the property. Now true, you are helping to pay off his mortgage over that period of time, but there is no guarantee that his investment in the house is going to make him any money. Many markets showed no appreciable increase in value from 1990 to 2000. However if you take that same house, and you purchase it, and then decide to put some good old swear equity into it you could quite easily end up with a house that has significantly increased value, perhaps as high as 325,000.

Conversely, you will not be so fortunate if you purchase a house for 600,000 and do a similar amount of work. You will be lucky to stretch the price up another 50,000 for your efforts. Ironically enough, if you were to rent a house very similar to this, you wouldn’t have to pay 2000 a month for rent. You can do the math yourself. The guy with the 250,000 house is making 17 % more on his investment compared to the owner of the 600,000 home.

But wait, it gets worse in the debate of renting or owning.

If you were fortunate enough to own a fancy place worth 2.5 million, you could not possibly rent it for more thanowning a home 4000/month. That would leave the owner of the cheap house some 60% ahead of the palace owner.

Is it any wonder people would rather rent than buy the really fancy places?

So my advice is this. If you want to rent, make sure that you rent a really expensive place, even if you have to get others to go in on it. On the other hand, if you’re going to be a landlord, make sure that you own and rent out places that are at the middle to lower end of the spectrum.

Like I said, there is no simple answer to the renting or owning debate, it is going to vary with every set of circumstances.

I’d love to know your experience with this. Please let me know in the comments below..

 

Till Next Time

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Sigrid McNab

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About Sigrid McNab

Sigrid McNab is the author of #1 Amazon Best Seller, speaker and the CEO and Founder of sigridmcnab.com. Sigrid specializes in blogging, attraction marketing, and generating highly qualified leads. Sigrid teaches people how to build a successful online business.

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