While more and more people allow themselves to believe otherwise, buying remains better than renting. Here in California, with home prices being so high, many renters tell themselves they are better off renting. Now that interest rates are going up, they are more convinced than ever. They could not be more wrong.
Footloose and fancy free
The primary argument put forth for renting is that buying ties you down. In fact, buying only commits you to a particular home/location for as long as you want. If you suddenly get a better opportunity on the other side of the country or the world, you can rent your out your current home. But you won’t be here to handle the “my sink is clogged” calls. That’s why you have a property manager. With rents jumping every few months, you are bound to be making more from renting it out than your mortgage payment.
The security of return
By keeping your home and renting it, you have a home to come back to when you find yourself missing California. Better yet, the price is a known quantity. Even better than that, it is price below that future value when you have been gone a couple of years and really want to get back.
Something for something
The best thing about buying is getting a piece of the home with every payment. Each month, part of your mortgage payment goes towards paying of the debt. That’s the piece that is now yours. Five years in, you have a sizable chunk of property as you benefit from your monthly debt reduction and the appreciation in value every year. The appreciation is 100% yours. Over the same 5 years period, how much of the rental property does the tenant own? That’s right, they don’t own any of it.
Stabilize your finances
Again, looking at the same 5 year period, the renter has seen several rent increases. The buyer is paying the same monthly payment with a fixed interest rate loan. So every penny of that raise or promotion is money that can be spent on a better life.
Notice that we haven’t even addressed better location, less crime, bigger home, or any of the other long list of benefits that make buying better than renting.
As long as you are employed, have fair credit and don’t have any recent negatives in your credit history, there is a way to get a loan. From ultra low down payments to no down payment altogether, see for yourself that buying is better than renting. You just need to be willing to do your part. Call me (760 622 5087) and I can get you started today.