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Rent or Buy – Buying Instead of Renting
Rent goes up…if you were a landlord wouldn’t you want to raise your rental rates to keep up with inflation or to get a little income boost? I certainly would! Typically, landlords are going to raise rent. It’s just the way it is. According to the real estate forcasting firm called REIS, Inc. rents have risen 3% per year since 1990.
Buying a house on a bi-weekly 15-Year fixed rate mortgage (hint) your mortgage payment will stay the same. Look, you are going to pay for housing either way, right?
Might as well earn yourself some home equity along the way. Buying instead of renting ensures that you kick the crap out of rising rental rates.
Let’s look at some math: If you paid a $750 rent and it rose 3% every year for fifteen years you would pay around $167,500 versus $135,000 as a homeowner with a house payment of $450 plus the other home expenses! In the end you own the home too!…If you rent you get squat. You just paid down the other guys debt.
Listen! Renting lines the other guys pocket…not yours. It earns them the wealth not you!
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