Latest / Military Real Estate Rookie Show / Rent Or Buy?

Transcript

Rent Or Buy? · Military Real Estate Rookie Show

• 0:01
  SPEAKER_00: Hello, military real estate rookie.
• 0:03
  SPEAKER_00: This is our girl Rina.
• 0:05
  SPEAKER_00: I am a retired major realtor and military housing advocate.
• 0:10
  SPEAKER_00: Today's question is one that I hear all the time, every week.
• 0:14
  SPEAKER_00: Should you keep renting or is it buying that I should be looking for?
• 0:19
  SPEAKER_00: So, should you keep reading or should you buy?
• 0:22
  SPEAKER_00: With home prices today, interest rates and rental costs continue to dominate the conversation.
• 0:29
  SPEAKER_00: Many people are unsure which option to make the most sense.
• 0:34
  SPEAKER_00: The truth is there's not one size fits all.
• 0:37
  SPEAKER_00: The right decision depends on financial situations, your lifestyle, your goals, and how long you plan to stay in one place.
• 0:46
  SPEAKER_00: Today, we are going to compare rental versus buying in today's market and help you make a more informed decision.
• 0:55
  SPEAKER_00: Let's get started.
• 0:57
  SPEAKER_00: Alright, so one, monthly payment comparison.
• 1:02
  SPEAKER_00: Okay, so when most people compare renting versus buying, they immediately look at the monthly payment.
• 1:09
  SPEAKER_00: For example, you may be renting a house for$2,000 a month.
• 1:14
  SPEAKER_00: Then you start looking at homes for sale and discover the mortgage payment might be$2,200 or$2,400 a month.
• 1:20
  SPEAKER_00: At first glance, you're like, oh, renting appears cheaper.
• 1:24
  SPEAKER_00: But here's the most important question: what are you actually getting out of the monthly payment?
• 1:30
  SPEAKER_00: When you rent, your payment covers your housing for that month.
• 1:35
  SPEAKER_00: So that's generally where the benefit ends.
• 1:38
  SPEAKER_00: When you own a home, part of your mortgage payment goes toward building equity, which we discuss in a moment.
• 1:45
  SPEAKER_00: And another factor is considered predictability.
• 1:48
  SPEAKER_00: If you're renting, your landlord may increase the rent with the lease expires.
• 1:55
  SPEAKER_00: Many renters have experienced significant rent increases over the last several years.
• 2:00
  SPEAKER_00: As homeowners with a fixed rate mortgage, your principal, your interest payment remains stable over the life of the loan.
• 2:10
  SPEAKER_00: Taxes and insurance may change, but your mortgage payment is generally more predictable than rent.
• 2:17
  SPEAKER_00: So while the monthly payment may be higher initially, the long-term picture may tell a different story.
• 2:26
  SPEAKER_00: So, number two, building equity.
• 2:30
  SPEAKER_00: Let's talk about one of the biggest advantages of home ownership: equity.
• 2:35
  SPEAKER_00: Equity is the difference between what your home is worth and what you owe on your mortgage.
• 2:41
  SPEAKER_00: Every month that you make a mortgage payment, you're gradually increasing your ownership stake in that property.
• 2:48
  SPEAKER_00: Think of this that way.
• 2:50
  SPEAKER_00: When you rent, you're helping your landlord build equity.
• 2:53
  SPEAKER_00: When you own, you're building equity for yourself.
• 2:57
  SPEAKER_00: Let's imagine you purchase a home for$300,000.
• 3:02
  SPEAKER_00: Over time, you pay down that loan balance.
• 3:05
  SPEAKER_00: At the same time, the property may increase in value.
• 3:09
  SPEAKER_00: Those two factors can create substantial wealth over the years.
• 3:14
  SPEAKER_00: Equity.
• 3:15
  SPEAKER_00: That equity can later be used to purchase another home, invest in real estate, fund renovations, help pay for educational expenses, support retirement goals.
• 3:27
  SPEAKER_00: For many Americans, home equity becomes one of their largest financial assets.
• 3:33
  SPEAKER_00: Part three, the flexibility of renting.
• 3:36
  SPEAKER_00: Hmm.
• 3:37
  SPEAKER_00: Now let's be fair.
• 3:38
  SPEAKER_00: Renting does have advantages, okay?
• 3:41
  SPEAKER_00: One of the biggest is flexibility.
• 3:43
  SPEAKER_00: If you receive military orders, take a new job, or simply decide relocating in an at lease is simpler than selling a home.
• 3:53
  SPEAKER_00: Renters generally don't have to worry about that.
• 3:56
  SPEAKER_00: Replacing a roof, HVAC, plumbing, major maintenance inspection, all the expenses that could come with buying a home.
• 4:04
  SPEAKER_00: When something breaks, a phone call to a landlord often solves the problem.
• 4:08
  SPEAKER_00: Renting can also be a good choice if you're uncertain about where you want to live in the next two years.
• 4:15
  SPEAKER_00: For military families, military families, flexibility is especially important.
• 4:20
  SPEAKER_00: If you're expecting to move or PCS, renting may be a better option.
• 4:25
  SPEAKER_00: Then depending on the timeline, home ownership works best when you are having enough to benefit from appreciation and equity growth.
• 4:34
  SPEAKER_00: Part 4.
• 4:35
  SPEAKER_00: Long-term wealth benefits.
• 4:38
  SPEAKER_00: Now let's discuss the reason many people, financial experts, incur the home ownership.
• 4:45
  SPEAKER_00: Real estate has historically been one of the most effective ways for families to build long-term wealth.
• 4:53
  SPEAKER_00: Why?
• 4:54
  SPEAKER_00: Because several wealth builders are working together.
• 4:58
  SPEAKER_00: First, you're paying down the loan.
• 5:00
  SPEAKER_00: And second, the property may appreciate over time.
• 5:04
  SPEAKER_00: And third, homeowners often benefit from certain tax advantages.
• 5:09
  SPEAKER_00: Fourth, you may even venture, you may venture leverage their property in another additional investment.
• 5:14
  SPEAKER_00: And then for military families, this can be especially strength powerful.
• 5:19
  SPEAKER_00: Many service members purchase homes at one duty station and then they convert it into a rental after PCS orders.
• 5:27
  SPEAKER_00: Over time, these properties can generate rental income while continuing to appreciate.
• 5:33
  SPEAKER_00: This strategy is often called the military house hack.
• 5:37
  SPEAKER_00: One property can become two, two can become three, and eventually those investments can create financial freedom and additional retirement income.
• 5:48
  SPEAKER_00: That power of the real estate.
• 5:50
  SPEAKER_00: That's the power of real estate.
• 5:52
  SPEAKER_00: You know, so how do you feel about it?
• 5:55
  SPEAKER_00: How do you know what option is right for you?
• 5:57
  SPEAKER_00: Ask yourself these questions.
• 5:59
  SPEAKER_00: How do I plan to stay in the area?
• 6:03
  SPEAKER_00: Do I have savings available?
• 6:05
  SPEAKER_00: Am I financially prepared for maintenance and repairs?
• 6:10
  SPEAKER_00: Do I want flexibility?
• 6:12
  SPEAKER_00: And I'm looking for long-term stability.
• 6:15
  SPEAKER_00: You know, what are my wealth building goals over the next four or five years?
• 6:21
  SPEAKER_00: You know, your answers help you guys these decisions.
• 6:24
  SPEAKER_00: It's not an overnight decision.
• 6:26
  SPEAKER_00: It's more of what does your future look like when you want to purchase a home versus renting a home?
• 6:33
  SPEAKER_00: It's all about your needs and your future.
• 6:36
  SPEAKER_00: So you don't have to decide what you want as far as building wealth or renting.
• 6:42
  SPEAKER_00: So, with that being said, renting is not bad.
• 6:46
  SPEAKER_00: You know, buying is not automatically better.
• 6:49
  SPEAKER_00: You know, each serves a different purpose.
• 6:51
  SPEAKER_00: Renting offers flexibility and fewer responsibilities.
• 6:56
  SPEAKER_00: Buying offers stability, you know, equity, and long-term wealth building opportunities.
• 7:01
  SPEAKER_00: The goal is not to follow what everyone is doing, it's about what your needs and wants are.
• 7:08
  SPEAKER_00: And the more informed you are, the better your decisions will be.
• 7:13
  SPEAKER_00: So I love to hear from you.
• 7:16
  SPEAKER_00: We can debate about the long-term worth versus buying and renting.
• 7:21
  SPEAKER_00: Send me your questions at renobaron realestate at gmail.com.
• 7:26
  SPEAKER_00: And if you found today's episode helpful, subscribe to my Military Real Estate Ricky podcast.
• 7:32
  SPEAKER_00: Leave a review and share the episode with a friend, family member, a fellow service member who is weighing the options on home buying experiences.
• 7:42
  SPEAKER_00: And remember, home ownership isn't just about having wealth and it's a place to live, it's about building a legacy.
• 7:50
  SPEAKER_00: Thanks for listening, and I'll see you guys on the next episode.
• 7:53
  SPEAKER_00: And remember, your home, my mission.
• 7:56
  SPEAKER_00: Rena Baron out.
• 7:57
  SPEAKER_00: Thank you.