“Renting Is Throwing Money Away” Is Completely Untrue
You may have heard the old adage “rent is a waste of money”. It seems like common sense. When you rent, you don’t buy anything, but you keep the home you buy. However, nothing could be further from the truth.
Since the personal finance blog Afford Anything is covered in enormous incredible detail, buying a home is much more difficult than “Rent out, only you can keep it.” Not only are these serious additional expenses that you will pay for the rest of your life (like renovations, renovations, and property taxes), but during the first few years of your mortgage, you won’t even acquire any capital!
Should I keep shooting? Is renting better than buying? Or should you buy a house? Is Buying the Best Choice? Your answer will depend on many factors, including:
- Local price-to-rent ratio.
- How long will you live there.
- Your alternative investment options.
- Your assumptions about inflation and investment returns.
- Maintenance costs, repairs, insurance, property tax and capital costs.
- Rent growth rate.
- And so on, and so on and so forth, and so on.
You get the picture. My goal is to convince you – once and for all – that this myth that “rent is a waste of money” is wrong. In fact, it is dangerous. This oversimplifies the fateful six-figure decision. This has likely caused thousands (or millions) of people to buy homes that they later regret.
The entire article is long, but you should definitely read it before deciding to buy instead of renting. While it is true that you buy an asset when you buy a home, that asset is barely keeping pace with inflation and you lose the ability to make other investments. Not to mention the rent is undervalued . Even if you think you’ve looked at this topic from top to bottom before, you’re likely to find some information (like a detailed explanation of the price-to-rent relationship) that you haven’t thought of before.
Rent is a waste of money … Right? | Treat yourself to anything through Rockstar Finance