Renting vs Owning?

So many times, I talk to young people who say, “I can’t afford to buy a house/condo.” Right now, with historically low interest rates, most homeowners are paying significantly less per month than those who are renting. Remember, rent is money you can’t get back.

Right now, the average cost to rent a three-bedroom home (valued at approximately $350,000), the monthly rent is $2,800. Over a ten-year period, with 3% yearly increases, that is over $385,000!!!

However, if you purchased that same house, you would have paid approximately $200,000 towards your loan balance. In addition, since real estate values tend to improve over the course of time, you could also potentially have an additional $200,000 worth of equity. Which scenario sounds better to you? Paying someone else $385,000 towards their investment? Or paying down your mortgage significantly, while you gain $200,000 worth of equity? Money you can use towards the purchase of your next home.