RENTING VS BUYING A HOUSE 🏠 Is Renting A Waste Of Money? #Best Education Page #Online Earning

how's it going today guys so what we're

talking about today is whether you

should buy a house or an apartment or go

out you'll see in most cases your budget

progress but whether you should buy a

house or whether you should rent a house

now I basically depends on what your

current situation is and there's a lot

of cases where it makes sense to rent

and a lot of situations where it makes

sense to buy so what I'm going to do is

first go through what the actual costs

are associated with renting versus

buying and then some of the advantages

and disadvantages of both of those so

you guys get a general idea and maybe

you can make a better decision as to

whether you want to rent the place or

buy a place now there are many perks to

renting a house instead of buying one

and a lot of that is related to luxuries

so if you don't want the annoyance of

maintaining a property of mowing a lawn

of doing the snow removal of fixing

things fixing leaky faucets all that

then renting may make sense for you and

this may be a luxury item that's worth

it to you that I have to worry about all

that stuff depending on what stage of

life you are in one main one may make

more sense than the other so what are

the actual costs associated with owning

a home the first one is probably the

biggest one that is your down payment on

the home and that's typically anywhere

from 3.5 to 20 or more percent down so

on a house that's $200,000 20% down we

have $40,000 so that's a significant

amount of money you may be able to do

something as the first time homebuyer

you can get less money put down but know

10 to 20 percent is very typical of what

you should expect to have put down on

the property so you do need to have some

money saved up for a down payment on the

house second is the appraisal as well as

the inspection you should probably

consider that you're going to be

spending five hundred dollars on each of

these and most mortgage companies

require this because they want to

determine if the house is worth what

you're offering because at the end of

the day if you don't pay your mortgage

payment they need to be able to sell

that asset recover their money and also

whether or not the house is in need of

any immediate repair so combined that's

about a thousand dollars you have to

spend on the appraisal and the

inspection the third is property taxes

and this varies so much depending on

where you live so I can't even begin to

guess what that would cost

but this is a recurring cost that you

pay every single year

in some cases you get to pay it twice a

year and some people opt to roll it in

with their mortgage so they have a

separate account with their mortgage

payments that goes towards the taxes and

some people pay it outside of their

mortgage so it's just something you pay

twice a year or once a year in most

cases then you have homeowners insurance

as well as flood insurance and most

people don't realize this but those are

completely different things so if you're

in an area that what you probably should

have flood insurance on top of your

homeowners insurance and again that just

vary so much I really couldn't put a

price on it then you have private

mortgage insurance that's called PMI and

most lenders require this if you have

less than 20% down because essentially

this protects the lender so if they end

up if your property gets foreclosed if

you're not making your payment's and

they sell and they sell at a loss that

insurance covers the gap of what they

loaned you versus what they sold it for

so basically that protects the lender

and it's moat is usually required if you

have less than 20% down on a house so

that's another factor another course you

have to factor in and in most cases is

just factored in with your mortgage

payment then you have utilities so this

could be your gas or oil or propane

depending on what your heat system is

your electric your water your sewer

cable and Internet as well as trash

service and if your home has a security

system as well that's another utility

that gets paid for each month in most

cases then there's the maintenance and

this can be a lot of money so this is

any repairs that need to be done

replacement of old appliances any

painting on the roof is a big one that's

very expensive if your roof goes dad you

need to reshingle your blue friend like

that that's a huge expense HVAC that's

another huge expense or your heating

system or your air conditioning system

and then as well any landscaping or snow

removal so if you have to clear your own

sidewalks and clear your own driveway

and you have to maintain a snow blower

in order to do that and if you have to

have your own lawn mower if you don't

own these things already the things you

have to buy to have and then furnishing

is a big one too because in most cases

the new home that you're moving into is

larger than your old space so you're

going to have to either you know go

contact your family and see what's in

the attic or buy new furniture so that's

something else this is all a lot of this

is for current costs but a lot of it's

also upfront cost so you have to have

money set aside in order to be able to

do this now

to compare it one of the costs

associated with renting a home the main

one is your monthly rent

and this varies by location generally

speaking though if you're in a good

neighborhood in a good area you're going

to be paying more for rent and if you're

not so good of a neighborhood it will be

less for rent and it also depends on the

property conditions so whether it's an

older house or if it's a new house as

well as the fact that it can change

anytime now basically whenever you renew

your lease your landlord has the ability

to increase rent so it's something to

consider it's kind of I mean in most

cases if you have a good reputation with

your landlord they hopefully will keep

it the same but they do have the right

to raise rent if you have to sign

another lease so it may go up if they

then they have that option to do that so

you have to consider that as well number

2 is a big one that is pets so if you're

a pet owner first of all some landlords

will not even let you rent and in some

cases that they do they will require pet

rent which is an additional fee each

month or they will require a security

deposit so if there's any damage to the

property as a result of having that pet

there they will hold on your security

deposit and that's something you don't

get back and in some cases they require

a security deposit regardless even if

you don't have pets that way if you do

any damage they can hold on to that so

most people require a security deposit

regardless but there may also be an

additional security deposit if you have

pets

number three is renter's insurance this

isn't required and it's also not very

expensive but it's worth having I know

I've read somewhere that it's averaged

about fifteen dollars a month but

basically this protects your belongings

if there's any damage done to them and I

actually have friends of mine who were

renting a place and the ceiling caved in

because of a water leak and all their

belongings were covered and they got

like five thousand dollars from that so

it's worth it to have just in case the

worst case scenario happens so I bet you

they're glad that they were paying $15 a

month for that policy number four is

utilities and there are some cases where

it may be paid by the landlord but

they're also it's more frequent that

your electric and your gas are paid for

by you generally water is metered just

for the building so you don't pay for

water but you may have to pay for your

gas and electric that's very common and

then a big one too that people don't

consider is laundry a lot of places

don't have laundry machines or maybe

they have the hookups for them but you

have to bring your own machines and if

you have to do laundry once a week you

got to figure that may cost you I don't

know maybe ten dollars a weekend-long

dramatic

Spence's as well as they take a lot of

time to go to the laundromat and do all

of your laundry so that's the debt

basically the cost of renting versus

buying a home okay so now we're going to

get into the pros and cons of renting

versus buying

so first the pros of buying a house

first of all the main one is that

homeowners build equity over time and

every dollar put towards the principle

of a loan build equity so eventually if

you pay that house off you own it free

and clear or even when you do decide to

sell if you built up any equity that is

money that you get when you do sell

homeowners can build sweat equity by

making repairs and improvements so if

you're handy yourself and you're good at

doing work around the house and you do

things to increase the value of the

property that's money in your pocket at

the end of the day there also may be tax

credits and first-time homebuyer credits

available to you because it's very the

government is very encouraging as far as

people buying homes investing in real

estate and your house could even earn

your rental income down the road so if

you pay it off and you owe it free and

clear or even if you decide to upgrade

and maybe build something behind that

current house or buy something down the

street you could keep that as a source

of rental income and the other thing

that people do as well as the

owner-occupied strategy so they buy a

multi-family property they live in one

of the apartments and they rent out the

others so that's a way to even improve

your mortgage and live for free in most

cases where you're basically the rental

income from the other apartment pays for

all the expenses which is a great thing

to do you're also free to customize your

home so if you want to make upgrades and

customize it that's completely up to you

that's you have the ability to do that

and the other thing is that based on

historical data the house should

appreciate in value over time as long as

you own the house for long enough now

the cons of buying a house is in a bad

market or in a bad area there's a risk

of owning a depreciating asset where the

house value goes down as you own it

you're also responsible for all

maintenance and repairs so if there's

any major repairs that come up that

could be a significant cost for you

there's also very high upfront costs

with buying a house and many people

don't have the means to have a down

payment and as well as other expenses we

mentioned at the beginning and you may

be in a pinch if you need to relocate

all of a sudden and that's not a good

situation to be in where you have to

relocate for a

or for family reasons and you have to

sell a house in a pinch you definitely

don't want to be in that situation okay

so what are the pros of renting a house

well the main one is that there's zero

responsibility for maintenance and

repairs you just call up your landlord

and say hey the fault is broken hey the

roof is leaking and that is not on you

the only problem is if your landlord

isn't good about making repairs you

Makes have to deal with that and you may

have to hound them as far as making

repairs that might be a bit of a

headache the other thing is that

relocation is much easier so if you're

in a job where you have to relocate

every couple of years or if you're not

in that job that you're going to stick

with long term or you're new to the area

relocation is much easier when you rent

you just have to either basically stay

there as long as you release or your

landlord may allow you to basically

lease it to somebody else

under your name or something like that

or you can get out of it easier than

when you own the home there's no

exposure to a potentially volatile real

estate market because you don't own

anything and you're just paying to rent

the place and the value of the home has

no effect on you the credit requirements

tend to be less strict so there's more

credit requirements when you're buying a

house in most cases versus renting a

house and utilities may be included in

some cases depending on the way that the

place is structured and the major

advantage of this too is the fact that

there's less upfront cost significantly

less upfront costs associated with

renting a house now the cons of renting

a house there are actually a lot of cons

the main one is that there's no equity

being built you're essentially just

throwing that money out the window and

you're never going to see any of that

money back the other thing is there's no

tax credits or benefits available to

renters the landlord also has the

ability to raise rent between lease

agreements so when you're signing your

lease agreement the landlord could raise

the rent on you the other thing is that

the landlord has the ability to evict

you so maybe they decide that they want

to sell the property and they want to

evict you part of a reason or maybe they

want to move back into the property or

move in their family members they have

the ability to evict you even if you're

a good paying tenant they can evict you

so that's not good as far as uncertainty

of your housing and then the other

problem is that the sale of the property

may impact you so here are two ways

number one is if the person is trying to

sell the property and they're constantly

showing the home they may call you up

and say hey you've got

comunit top to bottom I have to show the

place so that's kind of headache the

other thing is to maybe they sell the

property to somebody else and that

person decides they want to live there

and you could be evicted in that case as

well so those are the cons basically of

renting a house I would say anybody that

can afford to and if they're invested in

the area long term should buy a house

and if you're not invested in the area

or you don't have the means for the

upfront expenses associated with buying

a house that's the situation where you

would want to rent but anyways guys I'm

hoping that kind of cleared some things

up on renting versus buying if you guys

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