Are You Renting A Home? You Need To Watch This!
Filed under: Home Tips
In this video, I talk about why owning a house is much more stable than renting a house. There are undeniable pitfalls of renting that every family needs to consider. On the surface, rents have always seemed to be a little less expensive compared to a mortgage payment. But this payment can quickly change over time, and I want to explain to you how this happens.
You Are Paying Your Landlord’s Mortgage
First, when you are renting a house, you are paying someone else’s mortgage. You aren’t getting any principle benefits from the monthly payments you are making. Your landlord is not only receiving rent from you, but they also have the benefit of the principle reduction on the loan they have on the property.
Inflation Considerations
You can be the beneficiary of paying down the principle balance. But it’s also important to look at inflation. The truth is that inflation is always happening in some form. Even if inflation is low (or on the rise like it is now), you are locking in a payment when you own a house. But if you are renting, then you’re subject to incremental annual rent increases. It’s not uncommon for someone owning a house to pay more initially, but 10 years later they might be paying $500 or $600 less than market rents.
No Control Over the Property
A big problem being highlighted right now are long-term renters who are being approached by the landlords who want to sell the property. Owners are selling the rental properties because the market is so hot and they want to cash in on the opportunities. As a renter, you are always subject to whatever the landlord chooses to do with the property. On the other hand, you are never displaced out of your own home if you are paying the mortgage.
Renting vs. Buying: Consider the Long-term Benefits
To summarize: on the surface, owning your home may seem like it’s more expensive. But don’t be fooled by this fallacy. Over the long run, owning your house will be much more profitable for you and give you more security with locked-in payments that you have control over.
Do you have questions about buying real estate in Temecula? I’m just a phone call away. Contact me via text, email, or phone at (951) 473-0390 or [email protected].