Dewayne:
Stay tuned to hear the real benefits of why buying is better than renting.
Welcome back to another episode of our series, 60 lessons that we’ve learned in 60 years. And today we’re going to talk about the real benefits of buying versus renting.
So, let’s talk about the first thing and that is-
Kirk:
Mortgage…
Dewayne:
Yeah mortgage.
Kirk:
You’re talking about mortgage rates?
Dewayne:
Well, owning a home forces you to save, right? So, it’s a forced savings account in the sense that every time that you are paying your monthly payment, a portion of that is going towards your-
Kirk:
Rental.
Dewayne:
Right.
Kirk:
Correct.
Dewayne:
So it’s… I can give the example of, if there’s no appreciation, you’ve still built equity and-
Kirk:
You’re still paying it down. So, unlike when you’re renting… When you rent, you’re paying… Let’s say you’re a renter for five years. You pay all that rent, at the end of five years, you have nothing. And the chances of the landlord… Like I rent properties for people. I raise the rent 3%, 4% every year. So, I’m going to continue to raise your rent.
On a mortgage, as long as you do a fixed rate, it’s a fixed rate mortgage. So, your rent or your mortgage payment stays the exact same.
Dewayne:
Yeah, exactly. Exact same. You have security, because let’s say the landlord says, “You know what, it’s time for me to sell. I need the money. I want to buy another asset, or allocate that money somewhere else.” Now you got to move again. Now that’s first, last, security…
Kirk:
And moving costs.
Dewayne:
And moving costs. So, you can’t be kicked out. But again, going back to first, last, security, moving costs, I mean, for an FHA or VA, depending on what other mortgage vehicle out there, you can buy a house for-
Kirk:
A VA you can get with no money down. FHA, 2% to 3% down. Typically you can ask the seller to pay a portion, or all, of your closing cost. So literally, you could actually buy a house with less money than it costs you to get your first, last and security. And then on top of that, you’ve got the tax benefits.
Dewayne:
And in a low-interest rate environment, like what we’re in, your payment’s going to be less than what you could rent.
Kirk:
Absolutely. The reason people like me own rentals is because I can rent them and make a profit. If you want to buy, as long as you’ve got a reasonable credit score, we can get you a loan. And we have lenders out there that will work with people with 500, 600, 700 credit scores. We’ve even got a couple that will work with bankruptcies, I think it’s up to one or two years now. It used to be five or seven. But I think it’s one or two years.
So, if you’ve got a need, or you’re thinking about buying something, call us. At least let us put you with a lender and let you talk to that lender.
Dewayne:
And then I think, one of the things to talk on is the tax benefits. At the end of the year, you can write off your mortgage interest in your taxes.
Kirk:
Which you cannot do if you rent.
Dewayne:
Correct. And the last thing is you can do anything with property. You know, if you want to make improvements, you want to rip out the kitchen, if you want to paint that wall purple, go right ahead. But gosh-
Kirk:
Just make sure you paint it back something when you go to sell it.
Dewayne:
Benjamin Moore Decorator White whenever it comes time for selling.
Kirk:
Yeah, but we see people paint the walls pink, paint walls purple. You can do that as an owner. You cannot do that as a tenant, because they’re going to take it out of your security deposit.
Dewayne:
And sweat equity. If you’re doing things that are actually improving the value, kitchen, flooring, things of that nature, you’re building up equity in it as well.
Kirk:
You continue to bring the house up to standards, so somebody will pay you a premium for a house that you’ve brought up to standards.
Thanks for watching. You can always comment with any questions. We enjoy the questions a lot. Join us next time and learn what happens after an accepted contract. We’ll see you next week.
Dewayne:
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