This article is a review of a book called Your Money Milestones by Professor Moshe Milevsky. The article points out some comments from the author about why people should rent instead of buy.
"I think that a large proportion of individuals within the population should not own a home, or should push the purchase off as long as possible, and instead rent."
"Buying a house for an investment has strong similarities to someone being convinced stocks are a good investment for the long run but they decide to buy only one stock for their portfolio. I don’t care how reliable that one stock is, or how large are the dividends, that stock portfolio is not diversified. The same goes for housing."
I believe the authors point is that there are better things to invest in when you are young instead of a house and you should wait till you are older to buy a home.
Of course renting does have many advantages:
- Cost of maintenance and repairs falls on the owner, not the renter. This saves you hundreds of dollars per year on average.
- Mobility: It is easier to get up and move when you need to.
- You are not burdened and weighed down by mortgage debt. You won't suffer with the typical pattern of buy-refi-refi-buy-refi-refi-buy scenario where over time most people lose money when it comes to owning a home.
But if you are young and ambitious there are some great reasons to buy and even to buy now...providing you do it right. What are those things:
In this market, make sure you are buying the property for 25% or more under value...and that includes the value of properties that were foreclosures/REO's and distressed sales. Be patient they are defintely out there. Pay cash for the home and don't be encumbered by the debt that will come if you take on a mortgage and yoke yourself to an unrighteous lender who is loaning you unrighteous money that is created out of thin air. Can't pay cash for the home? Look to another Christian to help you purchase the home and work out an Equity Share Agreement with you. Then has you pay him a lease to own amount every month the amount of equity or ownership you have in the home increases. Use sweat equity to fix up the house. Do not buy a home in good condition. Buy a home that needs repair and remodeling and do the work yourself over time. Make sure the home will be a good rental property. After you fix it up and live in it for a while, then rent it out and take the cashflow and buy another home. Do this over and over again every 2-5 years and in 20 years you can own 5-10 homes FREE and CLEAR. Or buy a home that offers a rental unit so you can subsidize the cost of ownership. Buy a home that has some land where you can have a small farm. This will enable you to have a garden or even fields of crops, chickens for eggs and meat and if you have enough room some cows for milk and meat. This way you can provide food for you, your family and sell to others and give to those who are in need. BUY A PROPERTY THAT WILL PRODUCE INCOME AND WEALTH THROUGH LABOR AND PRODUCTION. THIS IS THE ULTIMATE WAY TO GO! For more great articles on Christian Finance, Christian Wealth and Christian Economics, please go here.