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Need advice on whether to rent a house or to buy it? Here are the advantages and disadvantages of renting a house and buying a house. Consider these before making your decision.
Advantages and disadvantages of renting a house and buying a house
More and more people in United States have started renting a house rather than buying it. The home owners rate has dropped a lot. Lets see the pros and cons of buying and rending houses.
Buying a house
It might be better to pay home loan than the rent since you will get a home at the end.
If you are rending a home, then you have to give out money periodically and there is nothing for the future.
Renting a house
Makes sense to rent a home when the funds are insufficient.
If you are rending a home, then you have to give out money periodically and there is nothing for the future.
It might be better to pay home loan than the rent since you will get a home at the end.
When buying a home, you are spending the huge money to buy the property. It becomes profit if the value of the property increases over the years. It will become a loss if the value of the property becomes less or stays constant.
Its good to rent as house, if you are a moving person.
If you have a better investment than buying a home which can give you more profit then go for it.
Once you spend the money to buy the house, you might run out of fund for your urgent needs.
You have to pay the property tax. Since you bought the house, you have to pay the property tax to the government. The government might make changes to the tax which will affect you.
Read below the opinions and comments of the people about whether buying a home is a way to build wealth or not.
Is Buying a Home the Best Way to Build Wealth?
People’s opinions & comments
Yes, I wish I had the money I flushed on rent for years. Unfortunately, the average house’s cost (along with interest) is beyond the reach of young people. It’s unfortunate that the way our tax system is setup does not enable young wage-earners to save for good goals.
No, the best way to build wealth is to inherit it, second is to marry it.
One home….NO! You’re not going to get rich owning a home. More like, go broke on the endless upkeep.
Of course. This is a qualified yes because home ownership is a step in the direction of financial independence. The best way to build wealth is through saving and investment. One should begin saving 15% of one’s earnings from the onset of employment; this requires personal discipline but it is the only way to achieve wealth through earned income. I suggest that those interested read “The Dean Witter Guide to Personal Investing”, a small book with no wasted words.
Buying a home, you are paying out money…open your own business and profit some money. That’s how you build wealth.
Require Maintenance, Taxes, etc… And as we learned in 2008 it’s not ALWAYS growth. It is nice to have a home you own for many other reasons but there are better pure investment alternatives.
buying a house is a way to build “equity” not wealth. In order to “become” wealthy, several things must occur.
1st – have an income source.
2nd – don’t borrow money to buy “Stuff”.
3rd – Pay cash only for “Stuff” or Don’t buy it
4th – Save money
Do things to “improve income”. Over time wealth accumulates. I do think borrowing for a house is OK. but only 15 year note. Any longer and the bank is who get’s wealthy.
If you can afford to buy a home do so. It is the biggest investment you will ever make.
Just make sure you buy a home you can afford.
No, Dickens …no, it’s not, as we learned during the bush nightmare….being a low-life, crooked scumbag is the ONLY way to build wealth…(think koch brothers, or Wall Streeters..)
No, but it can be a good way to build wealth. Not all land is created (or valued) equal.
It depends on your circumstances….if you just move to a new city for your job (and you may transfer shortly, like many jobs require), NO, that doesn’t make sense to buy a home. It depends on how long you’re going to stay put. It also depends on whether you find an outstandingly good deal/can make money on the sale, if you flip it.
No, I don’t recommend traditional two story homes. It’s a big waste. We need some different options.
I don’t know exactly. But I do know that the most expensive houses of all are usually mansions, castles, and the like just like the most expensive vehicles like Hummers, Cadillacs and Lincolns.
Tying your fortune to the 1%ers, or their stocks, since Obama became president was the best route to wealth. Housing may have recovered a few measly percentage points.
I think so. I wish I had the money I flushed on rent for years. Unfortunately, the average house’s cost (along with interest) is beyond the reach of young people. It’s unfortunate that the way our tax system is set up does not enable young wage-earners to save for good goals.
You never actually OWN a home. You rent it from various levels of government.
Not certain a path to wealth. With 4 years left on a 15 yr mortgage it offers a minimal amount of security.
There are places, like anywhere in the State of Maine where buying is NOT the best way to build wealth as virtually across the state from top to bottom property values are dropping and have been dropping at an alarming rate for over 50 years and property taxes are doing nothing but going up rocket speed.
That said, investing in real estate in many places is a great way to build wealth; places where property values are climbing and property taxes are stable, declining or non-existent.
Yeah.. but it’s even easier to just Run for Office and collect the Kickbacks. Having a home does have it’s bennies …. gives you a place to keep your refrigerator, which is where we should all keep our money. Buy a house if and when you can afford it.
No, It’s too risky and it ties you down in debt to a bank and a property that you might not be able to get rid of when you need to. I’ve rented all my life, and I’m glad I did. Very few people actually PAY off their homes, and fewer still make money off of them. The only people getting rich off of home ownership are realtors and bankers.
Nope. Work hard and buy your home, then when you need medical aid……..sell your home to help pay for it. Welcome to the real world 🙁
Big no, terrible investment choice unless you’re planning to buy a cheap one fix it up and flip it.
If you pay cash. Otherwise no. It is a way to save money, but not to get wealth.
Low interest rates? That is a matter of changes and three times the value of the house paid at the end. dont fall for this stupid game!
Yes and no, it’s not the best option for everyone. Some people move around too much and depending on the market at the time you can lose big time. Some people are just too lazy to be suitable home owners. Maintaining a house requires either a lot of money to keep paying others to do the work or a lot of work yourself. More and more men, especially younger men, are too lazy to put in the effort, all they want to do is spend the entire weekend vegetating in front of the TV watching ESPN while their wife takes the kids away to the part to play. A house is a responsibility, to yourself, your family and your neighbors, it’s not for everyone.
I buy a home to have a place to live, not to build wealth. Screw money.
A home is for living in; buying one just for wealth can backfire and often does…..
It is no guarantee except maybe for the banks- I don’t believe there are too many banks out there that lose…
Buy the most unkempt house in the best neighborhood, put in the elbow grease to cosmetically improve and enhance the property. The house has to have good structure and just suffer neglect by a lazy homeowner. Done with the first 3 houses until we found the proverbial dream home. It takes do it yourself energy.
Yes, just closed on my second home less then 2 weeks ago. My other property I lived in for 8 years renovating it the whole time. I turned it into a rental property in 2012. I paid the mortgage off in 2013. Now that rental income pays more then half of my current “new” mortgage. The home I just recently bought has an 1100 sqft apartment on the property as well that I will be using as a BnB. I’m hoping by the summer I will have a steady rental income from that and then my current mortgage will be 100% paid by others. I can put my own money toward renovations and paying the mortgage off quick. With interest rates the way there are I was able to get a 3.875% loan. Once in a lifetime rates if you ask me. If you have the money a home in a great location is always a solid investment.
That’s how you build wealth…outside of the normal 9-5 paycheck.
↳RE: You are correct, if you are a capable DIY, as you and I are. Also, now days, especially within city limits, it’s not easy doing your own work unless you are capable enough to get it, especially the plumbing and electrical, past inspection. Now days most men are barely able to swing a hammer, much less run code plumbing. Plus, you have to get some kind of satisfaction in doing that manual work, enjoying what you’ve accomplished with your own hands, there are fewer and fewer men like that. To them a good weekend is being able to watch 6 games on TV and remembering who all the winners are.
There is just too many costs associated with buying a house, by the time you get done adding house Insurance, house taxes, land taxes, and all the interest, it unfortunately breaks the bank and put the buyer’s into financial ruin.
Yes, it’s a good way to start. Best if done in your 20s if the market is a buyer’s market
Yes, It used to be a lot better, but housing has not moved up much since Oblunder became president. The god thing is that you can declare all that interest and taxes on you income tax to reduce that, and you are building equity in something. If you rent, you have nothing but a receipt. Even if houses remain steady in pricing, it’s still a great investment.
No, Home ownership is the first illusion in America. Look at your deed and see how you are described. You will find you are listed as tenant, not owner. If it were truly yours, the IRS couldn’t take it for back taxes.
Yes, Bricks and mortar. As long as you are in for the long run, you cannot lose. Everybody needs a roof over their heads. I love people who like to rent though. I get to collect rent from them.
Big no! I will not go into a lengthy explanation, but it is probably one of the worst ways to try and build wealth. It will contribute to building assets, but that is about it.
First learn the “rule of 72” and then take it from there.
You have to educate yourself financially first. A good place to start is Robert Kyosaki’s WHO STOLE MY MONEY, in the RICH DAD POOR DAD series.
No, I own 2 and no that is not the way to wealth. they can make you or break you.
It’s an investment. My home’s equity has increased by over 1/3 since I purchased it 4 years ago. Plus, no money being paid out to a landlord.
Everybody else gets rich when you own a home.
Buying, maintaining and improving the “right” house can be.
Yes, Is it the “Best” way or just a good way to build wealth. I think for responsible people buying a home can lead to a considerable boost their net assets. We are on our 3rd home and with each one we were in better financial condition than before purchasing the home.
Our first home which we lived in for 5 years didn’t make us any money, considering the cost of living there it ended up as a break even deal. But that also meant we essentially lived for free during those five years, no costs at all since we got all our money back at sale time. Doesn’t work that way with renting,..
Our second was a different story, after living in the house for 21 years even considering all the taxes, maintenance, mortgage interest, etc, we still came out way, way ahead to the tune of over $70,000 cash in hand.
So at the next house we started quite a bit ahead and after a mere 9 years, we owe nothing. Now that money we would have paid for rent or mortgage is usable for other things.
Yes, it is the best way to build the wealth of real estate brokers. For everyone else, not so much.
Yes, before the housing crash purchasing most any home in any neighborhood was a good investment. At that time the practice of “Flipping” your house purchase in six months was a money maker. Today only a few selected areas in the U.S. are still hot spots for real-estate investors. We have two homes we purchased when the market was very good…sadly we paid too high a price and cannot sell them. Fortunately for us they are excellent rentals.
It absolutely is. Those who have always rented are disqualified to answer this poll. I doubt any home owners answered no to this poll. There might be a few former homeowners who bought high (during the bubble created by govt trying to manipulate the free market) that would answer no, but not too far in the future they will be wishing their rent payment was as low as that mortgage payment was
No, Unless you can buy foreclosures, then maybe.
Yes, And land also. It’s no good owning a home if land isn’t with it. Someday, we will have to know how to farm our own. Can’t do that without land.
Not your first one. Taking loans out against yourself is easy with a house. But it is so easy that houses have become the credit card vacuum cleaners. That’s not how you accumulate wealth.
And though the value of a house goes up, if you’re only going to have that one, or that one investment, that wealth is locked up. To loan against it only takes your own wealth away.
It is if you don’t make poor financial decisions and bury yourself in debt. Owning property is the best way, but not the only way. Wealth building requires the ability to sell. If you need your house to live and don’t have another, you’re in a pinch.
As for the question, I say No, it’s not the best way to build wealth; at least useable wealth. That would require more than one house. A house appreciates. But it’s locked up, unless you tapp it. Then you owe on it and the cycle starts. It’s easy for us to see this differently.
I always lived in a modest house that I could afford on my own salary, always lived below my means, took advantage of saving plans and stock purchases thru work, and saved. Over the years, it built some nice wealth.
No, the best way to build wealth is to generate it by producing something people want. That’s still possible in America–much to the chagrin of professional parasites.
Not sure, it’s the best way but think its a secure way to build wealth even though the market goes up and down.
There are a lot of other ways. This might be the best way for someone but not for the other. Find the way that suits you.
Inheritence helps, esp. if income is “stagnant”, as in my case. School-tax is the big $$$ deal of the year. But being a “renter” has more “cons”, as I see low-wage friends struggle.
Yes… Owning property and owning a home is wealth in and of itself. Renting is a suckers deal if one can afford a place of their own.
It is a good way to not throw your money away. Build wealth? I think smart planning with home ownership as one part of an investment strategy is wise. What really builds wealth is education
it should be…rent is just flushed away…why pay someone else mortgage….but I understand you have special issues in the states.
“Undecided” because this really all depends on where you live and what the market is like. For me, renting would be like throwing money out the window every month. You’re paying someone else’s mortgage when you could be paying your own and it would likely cost less
Yes, but only if you are going to stay in the home long enough. The average American moves every 7 years, which is probably not long enough to break even vs. the prospect of renting. There are a lot of junk fees and expenses when you buy and sell real estate.
The conventional theory of home ownership is that renters cover the landlord’s mortgage, maintenance expenses, and taxes. If they are not, the landlord is taking a loss and will probably sell the property. If you are going to finance your landlord’s ownership of the property, you might as well own it yourself. Rent is not tax deductible, but mortgage interest and property tax are (for owners, not for tenants).
The other side of the argument is that home ownership depends on stable employment. How stable is your employer? If you get downsized, what are your prospects for alternative employment without being forced to move? An apartment dweller can get out of their lease with a lot less hassle than a homeowner can sell their house in a down market. Generally speaking, if you lose your job and fell compelled to sell your home, it’s probably a tough market for real estate.
Generally speaking… No. The best you can hope for is “Safe Haven” for your money, in RAW, Undeveloped Property… everything else after that is guesswork, and luck. and proper maintenance.
No, It used to be, I would say, certainly for the WWII generation after the war.Now I just don’t know, after the housing bubble burst and what happened to the housing markinet leadg up to it and what has gon on since. I know perfectly responsible people who bought homes before Bush’s crah who were not able to get what used to be the standard home loan: 10-20% down and a 30 year mortgage. It wasn’t because they didn’t qualify; it was because no such loans were available to them. I know one young couple who bought a “fixer upper”, did all the fixing up , and then the wife (National Guard helicopter pilot) was a beautiful home they had transferred and they decided to sell. They were under water and leaving a great house they had created, and could not get a decent price. Renting it out was something they shyed away from since before the marriage, the husband (a Marine helicopter pilot) had invested in a house in Hawaii to rent out and it was nothing but trouble for them. They lost money on that one, too. Hard for me to say.
No, Not here…Insurance cost kills ya….not only is there regular insurance but there is flood, and in most areas its a must…flood insurance alone can be almost the cost of your mortgage payment, then regular insurance on top of that…now add taxes…
One couple I know has to have hazard insurance on their property cause its near a lake…17,000 thousand a year …now if there is any damage from a storm or regular wear and tear, just think of what you will be paying per year….Sometimes its worth it when you need to sell but other times you dont.
And in reality you dont ever own it….you are always paying on it and can always lose it…
↳RE: Most people that have the ridiculous flood insurance you are talking about are the ones right on the water. Beach homes mostly because of tidal surges. Those homes are in the millions so I don’t think its much of a cost to them in the grand scheme.
I am in a flood zone and close to the water (across the street from a gulf inlet) and my flood insurance is $1000 for the year. For the regular home buyer that happens to be in a flood zone they are not going to go over $1000 annually.
↳RE:↳RE: Dont know what part of florida you are in but a guy we know and he is a real estate agent, doesnt live anywhere near a flood zone and he is paying over 3 grand a year…there is no water anywhere around him for miles…it all depends on what they have deemed flood zone..
↳RE:↳RE:↳RE: I live in Siesta Key FL. My front door is about 40 feet from a boat inlet/water.
Sounds like your friend is being taken for a ride by the insurance company especially if he has owned the home for more then 5 years. I started a new policy a month ago under the new flood insurance specs and I’m no where close to $3000 a year.