If you are young - Buy a home.
If you are retired - You may want to Rent!
We give you 3 good reasons why you should buy if you are young.
And give you 3 good reasons to rent if you are retired.
By Gary | April 22, 2019
Home ownership has so many upsides, and really hardly any downsides. If you are retired and already own a place – then by golly keep your home as long as you can. But if you are retired and don’t already own a place – then renting is the way to go.
Upsides of Owning a Home
1) If you don’t mind having roommates or running an Airbnb – when you own a home – they can almost make your house payment for you.
Some people like living alone. But if you don’t mind having roommates, you can significantly lower your monthly out of pocket expenses. And with all that money you save – you can put more of your money into a 401K.
If you are really adventurous, you can make almost twice as much money by starting an Airbnb. My parents rent out half of their home through Airbnb as retirees. This easily pays them enough for their yearly vacations to Europe and Asia.
2) Owning a home is how most people build up their net worth.
The average net worth of a home owner is over 40 times higher than that of a renter.
A recent Survey of Consumer Finances done by the Federal Reserve showed that average net worth of a homeowner is over $232,000. While the net worth of a renter is only $5,200.
That’s over 40 times the net worth of a renter. It’s hard to argue with those numbers. If you are young – over time, you will see your net worth significantly increase the longer you own your home.
3) As a home owner you don’t have to worry about your rent going up.
Rental prices are guaranteed to almost always go up. And if your neighborhood becomes a trendy area where people want to live, the rent can skyrocket.
Now if you own that same home and your mortgage is at a fixed rat, you don’t have to worry about any sudden increases.
Upsides for Renting a Home
1) As a renter – you have the flexibility to live any where you want.
If you have loud neighbors – just pack your bags and go. Or if you decide to move closer to your family -it’s easy – you just pack your bags and move.
2) As a renter, someone else pays the maintenance fees.
As a retiree, having to clean the gutters or repair a roof can be expensive, and dangerous if you slip and fall off your roof. Let the landlord take care of it.
3) If you are retired – you may not get all of your investment back if you have to move soon.
It used to be that housing prices always go up. Well, we have had several housing bubbles in the past twenty years. So housing prices certainly have their have ups and downs. Owning a home requires a sizable down payment, bank fees, and realtors fees. If circumstances tell you to move on, you will need to sell your home at a much higher cost to get a return on your investment.