Studies have shown that homeowners have a greater financial wealth than tenants. Sometimes as much as 45 times greater net worth than a tenant.
I know that some people say that when you’re a tenant you don’t have the responsibility of paying real estate taxes and performing the necessary maintenance and repairs on the home. But you need to realize that since the landlord incurs these expenses, these costs will be passed on to the tenants.
For now, let’s not discuss how difficult it is to save the down payment necessary to purchase a home. Let’s just take a look at the monthly expenses of owning a home.
So why do so many people continue to rent?
Another study says that a tenant who is living in an average property right now, could live in a nicer property then they are currently in without an increase in their monthly housing expense.
Look at it this way. Rents continually go up, but your mortgage payment can be fixed for a 30 year period. The equity that you build up over period of time, can be turned into non-taxable wealth when it is time to sell the property. Look at your mortgage as a forced savings account. That equity in your home can be a financial resource as you get older. You can sell the house and cash out, or possibly take a reverse mortgage to give you income after retirement.