Purchasing a home can seem like an overpriced dream for most young people. Wages are low, and cost of living is high. It seems obvious that renting is the smarter option, right? Wrong. Although your rent payment may seem to be saving you a little money every month, you are actually losing money in the long term.
Here are a few reasons why buying a home is a better long term financial decision.
You’re paying someone else’s mortgage.
Chances are you’re already paying off a mortgage, but it just doesn’t belong to you. The person you’re renting from probably has a mortgage or other bills. Your rent expense takes care of this and secures them additional income on top of that.
The market consistently grows as the population increases. This is means that your home could be rising in value every day. When you rent, you aren’t able to take advantage of this value increase and are essentially losing money.
Rent will rise.
When market value increases so does rent. Your rent payment may be affordable right now, but your landlord ultimately determines whether your rent increases between leases.