For many people, their home is not only their biggest investment but also their greatest accomplishment. But is it a good one? H2: The American Dream Homeownership used to be a hallmark of the American dream achieved. It proved you were now an adult. Proved you had “made it”. Proved your independence and sufficiency. But that’s no longer the case for many. New 20-and-30-somethings have realized that, for them, renting is a much better decision than buying.
Opportunity Costs
Making a decision always results in a loss, no matter the benefits you reap. An opportunity cost is what you could have gotten if you made choice A, but instead went with Choice B. A simple example would be deciding to get pizza instead of tacos. The opportunity cost of that decision was that you didn’t get to eat chips and salsa. There are a few distinct points when considering renting vs buying that a clear winner always comes out on top: Taxes: Homeowners win. Flexibility: Renter’s Win This is noted to prove that when making your housing decisions the main factor to consider is your lifestyle.
When Does Renting Cost More Than Homeownership?
The main reason people give when advocating for buying over renting is that renting costs more. This is false. One day, maybe, your mortgage will be paid off. But your property taxes, maintenance, repairs and HOA fees don’t magically disappear along with your mortgage. Also, the mortgage is more than the cost of your house when you sign papers. It’s all the interest accumulated for however long it takes you to pay it off as well. The price-to-rent ratio measures the affordability of renting and buying in a given housing market, calculated as a ratio of a home’s price compared to the average cost of a year’s worth of rent payments. It is the cost of a home divided by 12 (months) multiplied by how much that same home is renting for monthly. The overall cost of a home — principal, interest, money held in escrow, closing costs and HOA fees — are included in this equation. The total cost to rent is calculated, too. Rent at The Groves at 421 includes pool maintenance, valet trash service, weekly pest control, turn-key lifestyle, 24/7 maintenance, a state-of-the-art fitness center, flexible living arrangements and more all in a surprisingly serene environment conveniently located off of a highway for quick access to everything Lillington and surrounding areas has to offer.
Net Worth By Age
Your net worth is your assets subtracted from your liabilities. As a rule of thumb, the lower the percentage of your net worth your home makes up, the better. Diversity isn’t just important regarding your portfolio when it comes to stocks and bonds. It is recommended that one’s home does not exceed more than 20% to 30% of your overall net worth. You need time to save up for a down payment. Instead of opting for a home purchase at a time when you will struggle, need to refinance and worry about the unexpected costs of homeownership, put part of it towards rent and the rest, set aside. Paying as much as you can, comfortably, up-front when homeowning sets you up for long-term success.
Which is Right for You?
As mentioned at the start, renting vs buying is not always a conversation about money. Knowing which option fits you best is easily answered by the following questions: Do you plan to live in the area for less than 3 years or more? Do you want to maintain flexibility and mobility or do you want to start investing? Are you building/repairing your credit score or are you comfortable and looking to further your tax deductions? Are you saving up for a down payment or do you want to renovate?
Get Ready to Live Life on a Whole New Level
The Groves at 421 in Lillington, NC is an apartment community at its very best. Set in a peaceful, natural surroundings, the community is ideally located right off of Highway 421 in Harnett County, close to Campbell University and Central Harnett Hospital, and less than 45 minutes from the Triangle. The new construction apartments offer 108 impeccably styled 1, 2 and 3 bedroom floor plans equipped with modern conveniences that enable the upgraded lifestyle that area residents, students and young professionals dream of, and can now attain. The pet-friendly and ADA-accessible community encourages wellness and health as well as social interaction and connection through its numerous indoor and outdoor gathering areas. Residents can socialize at the clubhouse, and enjoy the pool, state-of-the-art fitness center, volleyball court, dog park, electric charging stations, trails and wooded views. Whether you want to be at the heart of it all, or be apart from it all, The Groves at 421 offers the best of both worlds.