Lessons from Monopoly: renting versus buying.
Should you rent or should you buy? Here are a few thoughts that may help you settle this question:
A lot of people rent because they think the cost of a monthly rental payment is lower than the cost of a mortgage payment. However, this is not entirely true. The average homeowner in the DMV area saves between $500 and $700 a month through tax savings from homeownership. Even though you may be paying more on a monthly basis, the tax write-off savings from mortgage interest and property taxes often make the net cost of a owning a home less than renting. And don’t forget—you get all the benefits of owning your own property, too!
The second thing is that whenever you make a payment, you are either 1) paying off your own house, or 2) paying off your landlord’s house! As a homeowner, each month you pay your monthly principal down, your net worth increases.
We all know from playing Monopoly that you win by buying real estate.
Thirdly, we all know from playing Monopoly that you win by buying real estate. When you buy real estate in real life, and then own it for 15-30 years, you have a house paid off! And if you multiple that by additional houses that you buy and rent out, your net worth over the long-term can be incredible. Remember, are you investing into your own future, or your landlord’s?
Finally, a lot of people think that you need a huge down payment to buy. There are actually a lot of programs out there for first-time homebuyers that you can get set up with. It really is easy to buy a house your first time.
If you have any additional questions about renting versus buying, or if you are interested in buying or selling, contact us anytime. We look forward to speaking with you soon!