Top 5 Reasons Why Buying is Better Than Renting
“Rule No. 1 : Never lose money. Rule No. 2 : Never forget Rule No. 1.” - Warren Buffett
Usually, when you’re in New Jersey, you think two things “why is taylor ham so good?” and “Why the hell are the rents so high!?.” New Jersey has some of the highest rents in the country. It’s because the rents are so high that those of you who can, should start piecing together why it is better to buy than to rent while in NJ!
[if !supportLists]1) [endif]In The Long Run It’s Way Cheaper - Every time a faucet breaks or a hot water heater busts, a renter somewhere is thanking their lucky stars they’re not the one doing the repairs. But let’s think about this for a second and paint a very real scenario. Say you’re paying $2400/mo to live in a condo in Hoboken; that’s $28,800/yr just on housing! Sure you might split it with 4 other dudes and a pooch, but the bottom line is that your mortgage will most likely be comparable or cheaper than the rent you are paying. And as for those costly expenses? Well, through your rent you’re paying for them anyway, so what’s the difference?
[if !supportLists]2) [endif]Make The Place Your Own - I think everyone has had a landlord that is well… a complete asshole. They won’t let you paint the place, they won’t let you put pictures up that might harm the walls, oh yea and if you want to adopt a pet, you might as well be indebted your first born. Buying eliminates all that. Decorate the place, make it your dream home, and have a small farm if you’d like! I know what you’re thinking “but Rob I can’t buy a house, I don’t have enough money!” yea yea I’ll get to that.
[if !supportLists]3) [endif]It’s A Trap - Maybe calling renting a trap is a bit drastic, but people love to complain about how they could never afford a downpayment on a home, yet they give away their down payment every year in the form of rent #seewherei’mgoingwiththis? Let’s take our first example of renting an apartment close to the city for $2400/mo that’s almost 28k you could put towards a home if you wanted to. I’m just sayin that if you’re going to pay someone's mortgage, it might as well be your own.
[if !supportLists]4) [endif]Ummm… Got Equity? - So here’s the thing with houses and real estate that I like so much: You can buy real estate and through time it will appreciate in value, and can eventually make you some serious money! Think about buying a just a small two bedroom starter home. Say it’s 100k and you put down 3.5% ($3,500) and use an FHA loan to purchase it. Over time you pay down, even pay off your mortgage payment and you added another bathroom to the house and have done renovations and repairs. Twenty years later, the home sells for 230k! Just from the market and repairs you made. Furthermore, in this situation it allows you to turn the tables and become a landlord yourself if you ever wanted to rent out your 2 bedroom starter home! The bottom line is that you can use your home as an asset, which is extremely powerful.
[if !supportLists]5) [endif]Taxes - When it comes to taxes it’s always best to talk to a CPA, but if you’re a renter, there might not be too much to talk about. You see, when you own a home you have a tax shelter. You can deduct the interest and property taxes of your home from your taxable income. However, if you’re a renter, you might not be able to write off your rent as you could if you actually owned a home.
I’ll leave you with this. Are there times and places to rent? Of course, however, in the long run, ownership will always be in the answer in New Jersey while rents remain high and interest rates remain low.