I guess the tradional answer is yes. But when you buy a home, you have soo much more costs, including maintenance, higher taxes (school, property, etc.), higher bills, etc. Plus you are also paying a lot of interest for a 30-year mortgage.
2007-07-01 10:32:08 · 8 answers · asked by Kaye00 1 in Business & Finance ➔ Renting & Real Estate
Houses are terrible investments...4% return is barely keeping up with inflation.
If you do not yet need a house...save your money and invest in something getting a far better return. Then when you have saved a nice amount (and maybe actually need a house) you can buy a house. Houses are luxuries but bad investments. They are expensive and tie up large sums of money that could otherwise be invested in superior returning investments.
Getting rid of rent doesn't save you any money. You have to look at the bottom line in two ways.
#1. How good is your return on investment? If you invest in the stock market, over the long-term, you will make way more money than if you sink your money (and the bank's) into real estate.
#2. What are your living expenses? Getting rid of rent makes no difference because you also are not paying yourself rent. The opportunity cost associated with living in your own home is that you could rent it to someone else. That lost opportunity cost hurts the return on your investment (see #1). The higher costs that you have mentioned result in a higher cost of living...especially if you can share an apartment.
The bottom line is that real estate is a poor investment and you will increase your living expenses. Don't buy a house until you need one. You will not regret waiting.
2007-07-01 11:08:18 · answer #1 · answered by Flyer 4 · 0⤊ 0⤋
Yes that is true but when you decided to leave your own home you as a general rule will make some money on it. Property rise at an average of 4% annually. So although it does cost more if you can afford to buy I would say go for it absolutely
2007-07-01 10:36:49 · answer #2 · answered by Belgrademitch 5 · 1⤊ 1⤋
You may have to maintain a house but after you pay 1000.00 a month in rent for about 2 1/2 years , you could have used that 26,000 for a down payment on a house. And with being a renter you can't sell your apartment so your rent money just makes your landlord a richer man.
you can however sell your house and make a profit.
Being a renter and home owner has its own con/pros just depends how you look at it.
2007-07-01 10:42:48 · answer #3 · answered by JillardG 5 · 1⤊ 1⤋
If you can afford a home go for it! Yes, you will have property taxes, maintain, and interest but if you purchase a house with equity, owning will work to your advantage.
2007-07-01 11:21:04 · answer #4 · answered by Chris P 3 · 0⤊ 1⤋
after paying the rent, you have gained nothing.
after paying the mortgage and the expenses you have gained equity from the principal portion of the payment and appreciation on the property.
2007-07-01 10:37:55 · answer #5 · answered by Rainman 5 · 1⤊ 1⤋
Like they said if you can afford it. You can also get a roommate to help with the bills.
2007-07-01 12:54:04 · answer #6 · answered by Lorne's Tribe 2 · 0⤊ 0⤋
if you can afford it then you should get your own place cause you own your own place and later on you can make money off of it. but if your not going to be living in the area for awhile then i would say stay in an apartment with your friend.
2007-07-01 10:44:10 · answer #7 · answered by NBJ23 2 · 0⤊ 2⤋
Financially, it might well be worth it. But it might not be worth the aggravation - only you can decide that. If anything breaks, it's yours to fix.
2007-07-01 11:03:53 · answer #8 · answered by Judy 7 · 0⤊ 0⤋