Let’s talk about buying and renting property. Many people prefer to rent their living space instead of securing a mortgage, based on different facts: no long-term commitment, lower payments, fewer maintenance costs, to name a few. And, when people come to get some kind of advice with me, their opening line normally goes like this:
“Phil should I buy my own house? My rent isn’t bad, it’s actually a little lower
than a mortgage payment right now!”
First of all, you should take in consideration the current rent prices, rent is higher than the mortgage payment in most states, especially in places like South Florida. Some might say: “My rent is a little lower than a mortgage payment right now” And that may be the case for the next few years, but remember, when you get a fixed rate mortgage, your mortgage payment is the same for those 30 years. Rent will always go up, remember that! Forget about this comparison, always remember that one fact.
Going deep into the numbers, you can see that your mortgage payment will always maintain itself, (it could even go lower if you refinance at the appropriate time!). Rent will always increase because property always increases in value, contrary to say… your car! Now, imagine that you get your own house for a lower price of the rent, you’d be saving a ton of money all while becoming a homeowner yourself.
And that’s not it! If you buy that first property, you could live in there for a few years, turn around and buy another property later, rent the one you originally purchased, and keep that chain going for as long as you want, making a business out of it!
Review the current state of rent prices against your local mortgage rates and see if this models is appropriate for you and your family! I’m here to help with all of your questions!
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