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At first glance, renting a house has a lot of appeal. You have the freedom to move once your lease runs out, and you don’t have to worry about paying for repairs if something major breaks. The recent crisis in the housing market has further discouraged people from buying a home. However, renters aren’t really saving any money with their choice to rent instead of buy. They are, in fact, wasting it. Buying a house is still the more cost effective of the two options.

 

  1. #1. Owning Saves You In The Long Term

Although the price tag of a house may seem high, paying rent month after month with nothing to show for it is even more expensive over ten or twenty years. After you pay off a mortgage, the house is yours, and you no longer have to pay for anything except property taxes. In addition, monthly mortgage payments are frequently cheaper than monthly rents, especially in large metro areas. You can read more articles agreeing with this point of view in major newspapers and business journals, such as Forbes and the Huffington Post.

 

  1. #2. Buying A House Can Make You A Profit

After you finish paying off your mortgage, you own the house, and you can sell it to turn a profit. Houses almost always increase in value over time, and you’ll earn more than you originally paid for the house. Then you can move on to a bigger, nicer home. Or, you can hang on to the house and rent it out. If you buy a multifamily house or a house with extra bedrooms, you can live there and rent it out while you’re still paying off the mortgage. Making money off your home isn’t an option when you’re a tenant.

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  1. #3. Buying Can Save You Money On Energy Costs

When you own your home, you can make modifications so that it’s more energy efficient. Installing a new air conditioner or washing machine may cost you money now, but it will pay for itself over time by drastically reducing the amount you pay for utilities. A rental property is owned by your landlord, and making energy efficient changes to the home isn’t going to benefit them in anyway. So you’re often stuck living in an outdated home that is costing you more money.

 

  1. #4. Rents Go Up While Mortgage Payments Don’t

Mortgage rates don’t increase with inflation, but rents do. If you buy a house, you’ll be paying the same amount in five years, but you’ll be paying more money for rent. Today’s interest rates are low due the housing market crisis, which saves you even more. Landlords can also raise the rent on you unexpectedly, which won’t happen when you buy. To learn more about what mortgage is right for you Read More for more information.

 

  1. #5. Homeowners Spend Less On Furniture

When you move every year or two, you are constantly having to fit your things into a new space. You may have to get rid of pieces of furniture in one place, but buy them again in the next. Over time, this can add up to a lot of money.

Author

Founder and chief editor of makemoneyinlife.com Blogger, Affiliate Marketer, Tech and SEO geek. Started this blog in 2011 to help others learn how to work from home, make money online or anything related to business and finances. You can contact me at makemoneyinlife@gmail.com

2 Comments

  1. How exactly is putting a roof over one’s head a waste of money? Yes, that money is going into a landlord’s pocket, but you are giving money in exchange for a place to live. Last time I checked having a place to live is an essential. People spend thousands and thousands of dollars on food in their lifetimes, money which you won’t see again. Do you consider buying food to eat a waste of money? Didn’t think so. Renting sure beats being homeless.
    #5 is absurd. Where do you get the idea that it is the norm for renters to move every “year or two”? The only time they generally move is if they are having problems with their rentals, landlords, other tenants, or if they buy a house. I don’t know of any renter that just gets up, packs their things, and moves for the fun of it.
    My husband and I have rented our townhome for the last 6 years. Our rent has not gone up once since we’ve lived here. Not every renter has to deal with rising rent costs. As for mortage payments being lower than monthly rent, that depends on where you live. Here, we would be spending nearly $600 to $700 more for monthly mortgage payments. Even if rent is more expensive, there’s the pesky little fact that if you can’t afford to save for a 20% downpayment, or if your debt to credit ratio is too high, you have no other option but to rent. This is the reason my husband and I rent. I have multiple sclerosis and the costs of prescriptions for it is enormous. We have to pay $10,000 before insurance will pay for he rest of it. Obviously we can’t save money to put down for a mortgage.
    I am tired of being told I am wasting my money by not buying a house. You know what if we had bought a home before my diagnosis, we would of been forced into foreclosure. So when buying a home there is no gurantee that you will stay there until the mortgage is payed off. There is no gurantee that you will get any money back from a mortagage. You never know when life will kick you in the butt and you lose your home due to a costly illness, getting fired from your job, etc..
    I prefer to look at this glass half-full. At least I have A roof over my head. I know someone who was formerly homeless and eating out of trash cans. Given my situation I am very grateful I am not that person. People need to stop it with making those who don’t follow the “american dream” to be failures in life.

  2. I completely disagree! You can rent places where you don’t pay anything for utilities as well, buying a house doesn’t mean you will make a profit. It depends on the market. I’ve seen lots of people loose money on their house because of timing, it is out of your control how the market reacts. You also don’t have to spend more on furniture if you are smart about it. I haven’t had to re-buy anything each time I’ve moved. Doing that doesn’t make any sense.

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