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Old 01-12-2008, 10:31 PM   #47
Mike Oxlong
Got Oliver Klozoff
Join Date: Feb 2003

Originally Posted by Radley77 View Post
The carrying costs to the bank in most cases exceeds the costs of renting. Wouldn't that be like throwing money away as well?
If you rent the money you are paying in rent is gone forever to your landlord.

If you buy at least that money is going towards building equity in your own property. Even if it does cost more than renting, it isn't being thrown away. When the property appreciates (which it eventually will provided you hold on to it long enough) then you will see even more of a retun on investment on your down payment.

If you put 10% down on a house and it appreciates 10% (whether that takes 1 year or 10 years) you just made 100% return on your money. Buying Real estate allows you to use the banks money to finance your investments. The bank doesn't get a penny of any of the appreciation. I do understand that the market can go down and there will be peaks and valleys but historically Real Estate has always gone up. Don't see that changing anytime soon.

If you think renting is the better option then by all means rent and please tell everyone else to rent as well. I have 5 investment properties that I rent out and I really appreciate the fact people are renting. Their money pays down my mortgage every month and adds to my equity in every property.

I agree with your statement about basing your choice on buying on lifestyle and economic situation. Some people don't want the headaches of home ownership, some people don't want to save for a down payment, there are still lots of reasons that people rent. For some it is the more affordable alternative.

However if you have the means to buy and can afford the payments as long as you buy smartly there aren't many better investments.
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