Renting is a costly mistake

Rent vs buyYes I know what you’re thinking that as a realtor my advice will always be to buy vs rent, however owning something just makes sense and one only need to do the math to discover that owning something makes sense. 

So let’s do some math, if you were to finance a mortgage of $800,000 using a variable rate of 2% it would cost you $3,388 per month.  If the rate goes up to 3%, it will cost you $3,786 per month. At 4%, the cost will be $4,208 per month. 

For a family looking at an $800,000 mortgage, they would most likely rent a place that would cost them at least $3K, $4K or $5K per month meaning that they’ll be wasting between $36,000 – $60,000 per year instead of putting that money towards paying down principal & interest. I’m not sure why anyone would want to do that. By the time they decide to get back into the buying market, either the prices will be higher or the interest rates will be higher thereby costing them more per month to own a home no matter how you slice it.  Even if you think the market will go down, it won’t go down by more than 5% and inevitably, interest rates will rise meaning it will simply cost you more to own the same property even if prices stay the same.   

I think that everyone should consider your buying instead of renting. I think renting will only cost you money in the long run. Imagine being retired and being at the mercy of paying rent? Now imagine being retired and having a home that’s fully paid off. The choice is yours and I know which one I’d choose.