Monday, October 5, 2015
Owing Your Home
Remains A Logical Long-Term Investment
There are varying opinions about the merits of treating a principal residence as a part of a long-term investment strategy, rather than renting a home and investing the remaining savings. Dollar for dollar, renting sometimes comes out ahead in such analyses, largely base on the lump sum required for most down payments, and the costs associated with ongoing maintenance. However, there are enormous advantages in making a commitment to purchase a home when it is certain to increase in value over time. Once you purchase a home, mortgage payments become a forced discipline that contributes to long-term equity. Meanwhile, you are able to enjoy the relative security of living in a place of your choosing, under relatively preferred terms. In other words, you make your home to your liking, while it makes you more financially secure over time. This may seem unconvincing to anyone who prefers to rent, but few renters possess the discipline to systematically invest their “spare” cash month after month the same way a homebuyer readily accepts a mortgage as a normal part of a meaningful and rewarding financial investment.