Buy versus Rent?

I was listening to a radio station yesterday morning and they were talking about a recent presentation by Suzie Orman who supposedly said that it is better to rent than to purchase a home.  I thought his would be a good topic to discuss.  The first question that I asked was do you think that Suzie Orman rents the home she lives in?  Do you think that she has sold all of her rental properties?   The thought crossed my mind about all of the old arguments that we’ve heard over the years about renting vs. purchasing.  I also thought about those people who invest in the stock market.  I have always been taught that if you buy low and sell high that you can make a lot of money!  If you purchase stocks at the bottom of the market and sell when it is at the top, you will make a good return on your investment.  In real estate I assume that you should buy when prices are low and  sell when prices are high.  Well prices are low, and contrary to the advice of some people, there are many people taking advantage of the low price to purchase homes.  It only makes sense that if you want to own a home that you would want to buy it at the bottom of the market.  In our market we have already experienced the bottom of the  market especially in the lower price ranges.  Home ownership has many benefits to the individual as well as the communities they live in.  Home ownership brings stability to families and also gives them a sense of belonging in the community.  Aside from the tax benefits of home ownership, there are also great opportunities to invest in property.  I have often wondered why people are out buying gold and paying ridiculously high prices for something that has mostly intrinsic value.  At over $1800.00 an ounce it just makes me think that the doomsday people have really suckered people into purchasing gold.  The only ones that are making money on gold are those who are selling it at the ridiculously high prices.  I remember many people that purchased homes on speculation driving the prices through the roof, and the roof came tumbling down as the market couldn’t sustain the over inflated prices and now you can buy homes for half of what you could 6 years ago.  Even though those homes have dropped dramatically in price, they still provide a place for people to live and it is also an investment that is insurable.  Eventually the prices will go back up and those that have purchased homes in this down market will make a lot of money.  If you are looking to invest and have the money to get into rental properties, right now is the time.  In the past most people who purchased residential rental properties had to supplement what they were getting for rent to cover the mortgage, but in todays market they can actually purchase the homes with a little down payment and the rents will support the payments on the properties.  Because of all the people who have lost their homes to foreclosure the rental market is booming.  Think about it, you can buy the homes that people have lost and rent them back to them, have the rent cover the payment and in a few years when prices have gone up and they have restored their credit you can sell it back to them at a good profit.  I know it sounds a little vulturous but that is how millionaires become millionaires.  To those who have lost homes I am sure if you asked them they would have much rather purchased those homes at the bottom of the market, chances are most of them would still be in them.

Leave a Reply