To Rent or Own a Home?
Written by soben on 2:10 PMIn recent months, I talked with many personal finance gurus who believe that owning a house is overvalued and that the location of works to be more profitable. However, when asked, these people do not confess to the tenants, but landlords. Their main motivation is that when retirement gets closer, they have tended to minimize ongoing costs associated with the location. Even if property taxes or fees to increase levels of the house they own, which still represent a small amount compared to expenditures during the lease.
In addition, the financial benefits of owning a home does not cover certain intangible aspects. These include attributes related to the will of man having control over a portion of the territory and pride of ownership. There are other advantages, like being able to use your property as collateral or to use a reverse mortgage in the event of a threat of financial crisis. A house can also be a tax shelter, as no tax on capital gains on a principal residence is taxed. In addition, a home is an invaluable asset and should be sent to family members.
Consider the argument against. An owner is likely to require at least a 5% deposit on a house. If you are 30 and buy a $ 400,000 home with 5.5% interest, you have to pay $ 470,367 alone mortgage interest, which works on a total of $ 870,000. Compare that to renting an apartment of three rooms for $ 1252 per month. This equates to about $ 800 less than the $ 2025 it would cost the mortgage for the aforementioned. Without property taxes, maintenance and utilities, you can easily save $ 1,250 per month for rent. In addition, this investment saved cash at a rate of 4% increase to $ 1.1 million when you reach 65.
Essentially, both sides of the argument have merit, except that owning a house does give you greater financial security, assuming you can afford the mortgage. If you choose the location, it is better to be attached to a life saving enough and hope you will not need a stimulus for most of your adult life.
Against A-sense, for the location, can be found in this Australian blog article. What is interesting post on how we accept and some old notions of socially accepted practices with regard to home ownership, and May you reconsider your position on this issue.
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