If you are still renting when the prices of homes and equity are both low, you are missing out on a lot of future equity. As far as apartments or houses, it doesn’t matter where you live as long as you’re happy. However, in years to come, where will you be financially if you continue to rent as apposed to owning your own home? You have a choice–either you can get the equity that builds over the years, or you can let someone else gladly take it.
Future equity for you. Nobody can tell what homes are going to be worth in another 10 years, but let’s face it, there’s a good chance prices are going to be a lot higher than they are right now. If you buy a home, you will be building equity right from the start. While it’s true that you pay mainly interest at the beginning, you are at an advantage if you purchase a home during a time when interest rates are reasonable.
No equity for your landlord. Stop handing all of your hard earned money over to someone who may have dozens of rentals and are just sitting on the golden egg and waiting for the market to hatch equity. They don’t need to have a multi-million dollar retirement as bad as you need a decent retirement for yourself.
Equity on improvements. If you fix up a house that you’re renting, it only benefits the landlord. When you move out, they can go ahead and rent it out to the next person who will surely enjoy the fantastic paint job you did in the property. However, if you make improvements on a home yourself, you can find a house that needs fixing in a very nice area and get more equity than you dreamed of, even if you do it little by little.
100% equity. If you decide to keep your house throughout the duration of your loan, you will own the property completely. At that point, you can sell your house in any market and collect 100% of the liquid assets to retire on, or even move into a smaller, less expensive home and keep the difference in equity for yourself. When you see that equity in your bank account, you’ll know you made the right decision.