#40: Rent vs. Buy
Episode 40: Rent Vs. Buy
One common mantra is that renting is throwing money away. Is that true? What are other things to consider?
Top 5 takeaways:
- It’s easy to understand where the “Homeownership is the best answer” comes from: If you rent for 30 years, you have “nothing” to show for it. If you pay a mortgage for 30 years, you have a house.
- If you buy a $400k home, you can figure roughly $3k a month in the mortgage payment (including taxes and insurance) plus average maintenance costs. Rent for a similar property would be roughly $2k/month. In 30 years, if that $400k house appreciated 4% (which is high!), it would be worth $1.3 million. If, over that 30 years, that renter invested the $1k/month, 8% returns would be $1.36 mil.
- People who believe that buying a house is stupid often have a history of being burned (the number of people who believe that spiked in 2008-2009).
- When renting, you don’t have to pay an unexpected $40k because your roof is leaking.
- Renting affords you a LOT more flexibility than owning a house.
Resources mentioned in this episode:
- FCN Podcast Episode #36: Life Insurance: The thunderdome throwdown!
- Launch Behind The Scenes webinar
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