I thought you were anti-homeownership, they said, because I think renting is underrated.
Even as a homeowner, Istillthink renting is underrated.
But that doesnt mean buying is a bad decision.
The housing crisis flipped that idea on its head, though, and people realized buying isnt always smart.
To address the question, it helps to seeboth sides of the argument.
Strong arguments in favor of buying are usually:
When you pay off your home, its yours.
You eliminate the expense of housing once youve paid it off.
Tax credits help offset some of the cost of homeownership.
Renting isnt throwing money awayyou get a place to live.
Renters dont have to pay for repairs, maintenance, or similar issues.
All of these points are valid, and I considered them in my own decision, too.
Buying a home can indeed be a bad financial move, but for many people, it isnt.
That goes for both sides, though, and the details vary depending on the situation.
Here are a fewcommonly overlooked factorsthat make up the specifics.
If renting is extremely costly in your area, itmightbe more affordable to buy a home.
These are just a few factors, and theyre still far from conclusive in either direction.
There are lots of caveats to consider.
If you dont earn a return, the point is moot.
Still, a calculator can only do so much.
If one of us lost our job, wed have trouble paying the mortgage.
All of that was enough to postpone buying, despite what the calculator said.
You have to consider affordability.
Contrary to popular belief,real estate barely outpaces inflationover time.
The investing myth is another valid argument against buying.
Just because your home isnt a greatinvestmentdoesnt necessarily make it a badpurchase.
With any purchase, theres the matter of individual affordability.
Most people are familiar with the20% rule for buying a home.
How do you define affordable, though?
This is where rules of thumb come in handy.
In other words, dont be house poor.
Of course, theres the emotional aspect, or the American Dream, of homeownership.
The bottom line is: sometimes its smarter to rent, and sometimes buying can work in your favor.
