Should I rent a house or buy a house when I’m 25 years old. The question is not something that most people have the option of answering. That being said 25 is really luge in this country and financially most people aren’t ready to buy a house by the time they are 25, but assuming you read this awesome blog and save money daily by the time your 25 you could have more than $70,000 in saving. (Check out yesterday’s article here to see how HERE). Here are three reasons why you should never consider renting and instead invest in a house. (I’m going to assume for this piece that you’ve been saving at least 5 dollars a day for 5 years with a total of $35,000 in savings).
- Rent from now till kingdom comes it is not yours. When you rent a property to live in all you get is the time you are living there for that period of time. Once you leave it is gone, it’s not yours, you have no equity in the building, and you are left with nothing but a drained checking account.
- Building money. When you buy a house you are building your wealth, and it may not seem like it now but you are. Buying a house means that you no longer rent and no matter what happens, as long as you keep up the payments, you have a place to live in for the foreseeable future. Over time your money is growing, as the property value is growing, and you have turned your initial $35,000 into a $1,000,000 home. This sentence alone should push you to never think about renting something and instead just buy something of your own. Owning a home, believe it or not, changes the way that you look on paper to investors, banks, and even prospective employers. It says that you were smart enough to save enough o buy a house, you’ve put down roots in this town, and for the time being you are not going to leave and thus will be a reliable employee.
- You can rent it in the future or take out equity. Once you have this house you have a place that can one day make you money. It at 25 you have a home then you have and will continue to care about your money. In 10 years, if you play your cards right you can buy another home and rent this one out to become another passive source of income. If you're smarter than that even you can sell your home after living in it for two years, as your primary residence, and avoid paying taxes on $250,000-$500,000 dollars of the sale price. This one is a little bit of a generous thing from the government and can only be used once every two years, but use it right and you can buy a bigger or better home by using your starter house as a proper investment.
Overall my advice is, save money as a child, it is never to early to start, and by the time your 25 and out of college you can buy a house instead of renting one. This will be a good investment, secure a place for you to live forever really, and have added bonuses to your life over time.