You may have come across news reports that suggest renting is a better option than owning a home at the moment. However, before making any decisions, it’s important to understand the basis of these claims.
Often, these reports make assumptions that are not feasible for the average household. For instance, one report suggests that renting is financially more beneficial because renters can invest the money they would have spent on homeownership costs elsewhere. This assumption relies on the idea that renters will take the money they would have spent on buying a home and put it into an investment portfolio.
But here’s the thing – most people who rent aren’t making those investments. Ken Johnson, Co-Author of the BH&J National Price-to-Rent Index, explains:
“One of the difficulties with the rent and reinvest model is many people . . . simply rent and spend the difference. . . . That’s wealth destroying.”
One of the reasons why owning a home is considered a wise investment is due to the wealth it helps accumulate over time. This is evident in the substantial difference in net worth between the average homeowner and the average renter (as shown in the graph below):
Before you decide to renew your rental agreement, it’s worth considering the potential for wealth-building that comes with homeownership.
Final Thoughts
In conclusion, while renting may be a viable option for some, owning a home is likely a better choice in today’s market. With low mortgage rates and rising home values, homeownership provides a stable investment and a sense of pride and accomplishment that renting cannot match. If you’re uncertain about whether to rent or buy a home, feel free to get in touch with me so we can assist you in making the right decision.
Find out why Kaya Homes is the leader in Long Island Real Estate and are your go-to realtor in the Lynbrook, Oceanside, Malverne, Hewlett, Valley Stream, East Rockaway, Woodmere, Cedarhurst, Baldwin, North Woodmere, Woodsburgh, Hewlett Neck Hewlett Harbor, Bellmore,Wantagh,Merrick and Freeport area. www.kayahomesny.com
Wed, 15 Mar 2023 19:15:37 +0000
