Boomers are now saying "I Want to Rent My Home"!
The Baby Boomers are flocking to Florida these days, and many are getting wise and saying "I want to rent my home, not buy"!
There is an old saying: “You are throwing away your money if you rent” And yet another saying is: “An excellent way to build wealth is through home ownership." While accepted as "the truth", if you take a closer look you may may just reconsider and join the many voices shouting “I want to rent my home”!
Why “You’re throwing away your money if you rent” is a myth
Are you really? In first five years of home ownership you're simply paying the bank for the privilege of borrowing the money! Then you just barely begin to pay down the principal. Costs on top of the interest include:
*Closing costs, *Property taxes, *Maintenance, *Decorating, etc. Are we talking thousands of dollars yet? 
Let’s look at the difference renting a home: Renters only pay for one thing each month: a safe, affordable dwelling.
*No Closing costs, *No interest fees, *Minimal to no maintenance, *No property taxes or anything else… just rent!
Here is yet another point: renters pay a security deposit, first and last month’s rent. But, the security is almost always returned to the renter when they move out. The first and last month’s rent insures you have two months paid up.
The high cost of buying a home:
Look at what is paid up front, and never to be seen again: there are closing costs (usually 5% of the loan amount) and real estate agent commissions, (usually around 6% of loan amount). So you’ve paid 11 percent of the loan amount up front and if your home doesn’t appreciate by at least that much, you can’t even break even.
If you’re looking at renting a home in the Pensacola area you may also want to speak with a rental expert about houses for rent in Navy Point, Florida, and houses for rent in Pensacola. If you’re looking at apartment rental you may want to speak with an apartment rental expert.
Why "Buying a house is a good investment" is also a myth the banks want you to believe:
Some people think owning means tax benefits. Let'In reality tax benefits are a drop in the investment "ocean." Basically, if you are deducting your mortgage interest from taxable income, it amounts to about 30 cents on the dollar you paid. Not a great deduction or return. Deducting interest really doesn’t give you an advantage tax-wise. The only way it would is if you pay more in interest than the standard deduction allowed. During a boom in housing it seemed a great investment. Under the assumption of this myth, many thought home prices would rise. We have now seen, however, the biggest foreclosure crisis in US history!
Housing is shelter, plain and simple. Realtor associations and banks want to keep you buying and keep telling you paying off your mortgage is building long-term wealth.
The rate of appreciation on housing doesn’t surpass inflation over the long-term. If you calculate the real return on housing for the past 100 plus years (say from 1890-2004) you come out with 0.4% per year!!!!
Why not take the dollars saved by renting and invest elsewhere? Think about it – you’re literally saving hundreds to thousands compared to a homeowner and that money can be put to great investment use!
If you’re considering Florida, there are houses for rent in Pensacola. Check them out. But whether in Pensacola or Boise, ID, we think you'll decide to save your money, invest it elsewhere and rent.