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Paying rent is not throwing your money away. You are rather trading money for as you put it "a roof over your head". There are many advantages to renting as apposed to buying such as the ability to relocate more easily, low maintenence living, etc.
I'm sure that most banks, real estate agents, insurance companies, etc. would prefer us all to buy rather than rent since their jobs depend on it. In reality all we really end up buying is the perception of ownership since many of us including myself live in a development, jammed packed full of homes and mortgaged up to our eyeballs. Paying interest is throwing money away. It would be better to rent and not be in debt for many people. |
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Chadness
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You are basically in a hotel with no room service. Five years from now, if you decide to move, you will have nothing to show for the five years of rent you paid other than the fact you are still alive! |
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wrench'n away
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Well renting is ok for a while It should not be done for years on end, you will be paying for someone elses house. My friend has rented his house for over 35 YEARS ! He could have paid for it three times over . |
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Jamie Janiero
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You have a point there, paying rentals gives you a roof over your head, a rented roof. Rentals are often high.
The landlord who is renting it out to you he's earning his capital back. Put it this way, you're paying for the house that he will eventually own. |
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ken p
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Because most people believe that paying rent gives you NO return on your money, where as owning at least gives you a chance of building equity in your home. As you house appriciates in value you can borrow from the equity do build your businees, go on vacation, pay for more schooling, etc. And when you're ready to retire it may have so much equity that when you sell it and take the cash you can move some where else and live off the cash for the rest of your life. Of course there are declines in value, upkeep, and sometimes larger payments to handle than just renting. Research your area and if its in a growing stage and you can afford to buy, do it. Good luck |
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Joey C
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I don't think renting is throwing money away. People just see it that way because you don't actually get to own it someday. Throwing your money away would be doing just that, throwing it in the trashcan. You get a safe place to sleep at night that is away from the elements and the outside world. That is something of value to most people. In some places renting seems like it can be a great investment. Lets say you have 1 million bucks cash and you want to live in super pricey Bay area California. You could buy a house for a million bucks and then have to pay for insurance, property taxes, and maintnence. Or you could rent something similiar for say 3000 a month. So instead of buying the house and tying up your money, you decide to rent it. Put your money in a money Market Account or a dividend paying stock and pay the rent with the interest earned. You could easily make a conservative 5% a year return and pay the rent with that. Best part about it is that you still have a million bucks and you don't have to deal with paying property taxes which could be 10k a year alone. In areas where the price of house divided by price of years rent is lower it makes more sense to buy. Say it cost 1 mill to buy a house but to rent it would be 200 k a year, you would be better off buying it unless you could get a higher return than that on your money. |
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Tinar
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yeah for sure, equity is a huge thing... if you're looking long term, renting won't get you anywhere. |
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Joshua S
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If you were buying your own house, the money you pay every month is building equity in something that you can sell and make your money back; whereas paying rent to somebody is helping them to build equity, and it is money you will never see again . In a way you are throwing away money because after a year of paying rent, you have nothing to show for it. Then again, it is not convenient for everybody to own a house. It's just like leasing a car, you pay a lot of money every month for something; but after three years ; you still have no car and that money just helps somebody else out. |
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akka
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Its based on the premise that real estate will continue to appreciate. And the presumption is right because as the population increases the pressure on real estate has to go up.
The money you pay as rent can be paid towards mortgage and you end up owning the property which can appreciate. |
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Nikki W
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Although owning an equity building property has monitary advantages, owning a property is not for everyone. If you're happy with renting, you're right, it provides what you need plus maintenance and upkeep of landscape are all provided for.
Still, especially for single person with decent earning, your tax bill is much higher than those with deductible items like interest on a home loan, property tax, dependents, etc. Also, after paying for years, you'll actually own something and you'll be able to borrow against it (called the equity loan). With rentals, it will never become yours ergo never borrow against them either.
Nevertheless, owning a home doesn't lead to happiness for all people. |
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dogwarrior2001
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Like it was said earlier, when you rent there are certain tax breaks you cannot get, however, being a renter, unless it is in the lease, you don't have to do home repairs, yard work, pay homeowners insurance, though you should have renter insurance for your property,
When you buy a house, you normally get the interest you pay on the house is tax-deductible, along with any improvements you have to make toward energy conservation, local taxes and possibly more. Owning a house is a lot of worry and work, but think of the pride in ownership, the fact that is your yard you just mowed, just planted a tree in, painted that window. The increased value of your house is returnable when you sale the house.
So while you rent, it never is really yours, often the rent is less than the house payment. The labor involved with working on the house is generally Nil with a rental. |
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dcgirl
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It's not throwing your money away but you are really not getting your money's worth. When you own instead of rent, you get tax benefits and equity. You can leverage that equity to move into bigger investments, pay for college, build towards retirement, etc.
You have to pay a big chunk of money every month, no matter where you live. You ought to get something more than a roof in return! |
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jamieinreno
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because you're not paying towards something you own, you're paying on someone else's stuff. it is throwing money away if you are able to own, but still choose to rent. |
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Rx
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They say that because of the fact that even though it is a short term solution the thing is it is SHORT-TERM meaning you could be saving that for a place that could one day be yours forever. |
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gfdgirl
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Because once the rent money leaves your hand, you never see it again. When you use that same money towards a mortgage, you're not only paying for the cost of the house you purchased, the property value continues to rise and you're making money. I spent a lot of years thinking that buying wasn't much different than renting because most of the money went towards interet. I wish I had understood the value of equity and home appreciation! I'd be a lot wealthier today. |
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kdonahoema
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For tax purposes and building equity, renting is like throwing money away. |
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?
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It's throwing money away because you could be spending that money in a "savings account". The savings account could be cashed in when you sell your house. Also, lets say a home price is $100,000. today. In 5 years you could sell it for $150,000. making a nice profit for you. |
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gcbtrading
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Compared to purchasing, it is.
When you purchase, all the money you put in, you will get back out.
When you rent...all the money you put in, your landlord will get back out |
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dukalink6000
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Because a mortgage payment on a house is sometimes less than rent, at the end of the road, you'll have nothing. I will have equity built up in the house, which I own. |
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answerb4midnight
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true!
this is how i feel too! For instance, the stinkin $603 I paid for my 732 sq. foot rental home covers me and my family for the 31 days of this month.
yeah, yeah I know I'm not building equity and so you can say I'm just throwing my moolah away...but for now that's all I can do...
However, in less than 3 months I will be moving into a 1200 sq. foot home that I have and still am helping to build.. I'm a partner family with Habitat....how cool is that?!?!? So my rental prostitute days are numbered....Allelujah! |
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2good4u
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i was paying 450 for a two bedroom house......my house payment when i bought my house................250. It's like throwing away lots of money that you could use.True you have to fix stuff that goes wrong, but that's where the extra money can go |
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avery s
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because by the time u put ur money into renting something u could have been buying a house instead. if i were u i would try to find a house that i could buy that cost about the same as what u r paying for rent. then u can actually call it urs and not somebody elses. |
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georgiapeach
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Because, you can often buy a house with monthly payments as low or lower than rent. You will earn equity on your house and you can also claim the interest and taxes as a deduction on your income tax. It is a win-win situation. However, due to difficulties with finances or low income, many people can not qualify to buy a home. These people have no choice but to rent.Thankfully, many new programs are available to help many of these people become first time home buyers. Buying a home is a great investment! |
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Sean
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its not throwing your money away. I use to own and spent a lot of money in repairs upgrades and landscaping. Then my work decided to move to a different building over 30 miles away. Traffic took me over an hour to get home. Deciding to sell I lost huge because of the housing market crash and had to settle with my mortgage. I live in a luxury townhome now and pay the same as I did with my mortgage but I can move anytime I want and I dont pay anything for repairs...Microwave went out - brand new one the next day...Garage door broke - five maintenance workers lifted the door so I could get my car out and it was fixed the next day again costing me nothing. Also if I get laid off again that will dictate moving to a smaller place instead of moving to a smaller place AND facing a foreclosure. With renting you have more options, nothing against people who want to own but I will not own a house again. |
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