Owning vs. Renting

How Much Money Will I Save by Owning a home?

There is a lot of debate about if you save money by owning a home. I see some Investment Pros argue that if you put all your housing money into other investments you would make more money. What these “Geniuses” never seem to consider is that you have to live somewhere. Yes we all have to move out of our parents basement sometime and that generally means rent! Unless you have put yourself in a position to buy.

You will not save any money by not buying a home (unless you live in your Do you want to Own a Home

parents basement or other similar arrangement). So all that money you are saving for the stock market, bonds, silver, gold, or commemorative plates, will end up going to rent.

If you have extra money I can see where the argument can be made for any of these investments (although real estate is still the best – Ask Me Why!), but before you can invest you need a place to live.

If you are renting you should call me and we can run the calculator on your situation, but here is what I find:

  1. The people I am seeing buy homes now end up paying less for their home (Yes a home they own) than they were paying in rent.
  2. If they are not paying less, after taking the tax deduction on the interest they are. Often the home is a better home too.
  3. Most home mortgage are fixed rate and tax increases on real property are severely limited by law in California. What does this mean? It means your housing cost is fixed (probably for 30 years.)
  4. Rents go up. I do not know of any rents that have gone down over time.
  5. By buying a home you are fixing your housing cost in place.
  6. If you put a 20% down payment on a $500,000.00 home you have $100,000.00 of equity in the home. If home values go up an average of 4% a year (more right now) your money is earning 20% a year. (Can the stock market top that long term?) And Remember you can buy with a lot less than 20% down; sometimes nothing.
  7. If prices should go down your house payment is fixed, in most cases people can ride it out till the housing market bounces back (and it always does).
  8. If you should experience financial hardship and have trouble with housing expenses you are generally safer in a home you own than a rented property. There are more tools and techniques for getting back on track and it is a longer process to get you out of the house.
  9. If you die in a rented property the property gets sold to someone else. If you owned it your heirs have money for your final expenses and you leave them something.
  10. If you own a home when you retire you may not have a house payment. If you need money you can continue to live in it with a reverse mortgage and it will provide you income.

Owning a home is one of the wisest things you can do for financial security and your future. Owning a home now is better than owning a home later. There are many great programs for owning a home with little or nothing down. There is even a 5% rebate program on home purchases with some of the new lending programs.

Talk to us about how you can own a home now!

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About robertjrussellcompanies

International Real Estate Agent * Insurance Broker * Radio Talk Show Host * Public Speaker * find out about me - visit http://www.robertjrussellcompanies.com
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