Deciding whether to rent or to buy is a matter of perspective and I must admit to being sick and tired of these so-called experts giving advice on this topic. Most of the time the advice is coming from the perspective of someone who is already wealthy. They wax poetic to those of us who are not wealthy about what I like to call “The Giants”.
TWO THINGS CAN BE TRUE AT THE SAME TIME
The ”experts” are very quick to show you “The Giants” of homeownership. They mention the maintenance, HOA fees, homeowner’s insurance and major repair expenses. Those are all truths related to homeownership. But, here’s the thing, two things could be true at the same time? Here’s the other truth that seems to ALWAYS get left out. As you pay your mortgage down, in most cases, the value of your home is also increasing. This is called appreciation and the difference between what you owe and the value of your home is called your equity. Equity is essentially the potential money you would make were you to sell your home.
If you’re a Christian, a student of the bible, or grew up in the church, then you have likely heard the story of Moses’s exodus from Egypt. During his journey, God directed him to send twelve scouts to explore the land of Canaan “which I give unto the children of Israel: of every tribe of their fathers shall ye send a man, every one a PRINCE among them.” Numbers 13-14
Moses carried out this directive with specific instructions for the twelve scouts – to find out about the people, the land and the cities. The scouts returned at the end of forty days with their report, stating that “surely the land floweth with milk and honey…” One man, Caleb, felt confident that the land could be overcome. The other eleven men, however, saw only the “men of great stature”. This is what I call “The Giants.”
IS WEALTH ONLY FOR THE WEALTHY?
Speaking from the perspective of a real estate agent who has sold millions of dollars in homes over the years, most clients, who have bought and sold their homes within a five-year span, have walked away from the closing table with funds in excess of $150,000. Now, to an expert who is already a multi-millionaire, this may seem like small potatoes. However, for those of us who are not wealthy, this is life changing, get out of debt, put a nice down payment on a house that better suits our needs and still have enough to add to savings, money.
The perceived “Giants” of owning a home can be conquered with careful planning, choosing the right home and working with a good real estate agent, lender and home inspector. What can’t be changed, however, is a lost opportunity to create generational wealth for your family.
As for the question of renting or buying, the answer is easy. If you can buy, buy. If you can’t, then rent until you can. But keep in mind that, generally speaking, house prices are continuing to go up not down so the sooner you get started on your path to homeownership, the sooner you begin building generational wealth.
Taking the leap into homeownership requires courage and faith. Wealth is not just for those who are already wealthy. The opportunity is there for us all, if we only believe and put our faith to work.
