2019-10-31 The Wealthy Renter Flashcards
Why do people think that renting means throwing away money / paying someone elseβs mortgage?
Most people have been brainwashed into thinking that owning is necessarily better than renting.
Why does the government wants you to buy a home?
Buying a home means settling in a fixed position for a number of years, getting a mortgage and a job which is going to bring in taxes for the governement.
What are the main benefits to renting?
Less risk.
Predictable cost.
No investment illusion. (Thinking your home is an investment)
You can change jobs / move to another location really cheaply.
You donβt have any expensive maintenance to do.
Why is buying a home as your single investment not a great idea?
The lack of diversification.
What are the costs associated with buying a home?
Mortgage payment.
Property tax.
Maintenance cost.
What usually goes up in value when it comes to real estate?
Land. Buildings never go up in a value, only land does.
Why are homeowners also paying some forms of rent?
They are renting services from the city in the forms of property taxes.
They are paying unrecoverable maintenance costs.
They are renting money from the bank while they have a mortgage.
What is the expected average long term return (value-increase) on real estate?
3%
What is the main benefit of home-ownership for people who are not keen to investing?
A mortgage forces discipline.
