With some items, there’s a clear-cut answer in the rent vs. own debate. For example, unless you’re in the moving business, it just doesn’t make sense to buy your own moving truck. A moving truck is definitely something you’d be better off renting. With other items, you’re better off just out-right buying them. Underwear, for example, comes to mind. But what about your residence. Financially speaking, are you better off buying a house or renting an apartment?
Owning a home is part of the American Dream. It’s just something that people are expected to do once they have the financial means (if not sooner). As far as renting an apartment goes, I’ve always heard it referred to as “throwing money away.” You pay money every month, but in the end, you have nothing to show for it. Owning a home is definitely the way to go, right?
Not so fast, says Jack Hough of SmartMoney. He argues that over the long term, the value of houses won’t appreciate more than the level of inflation, so you’re better off renting and investing your money in stocks, which average a 7% return per year over the long term. Hough also goes into a great deal of detail about real estate trends, home ownership costs, tax considerations, etc. It’s a good read, and definitely something to think about before you think about purchasing a home.
