tylerrr wrote:true, but I can't save enough money to buy a decent house i don't think(in an area where I enjoy living).....That basically takes away all my capital I could use in the stock market, bonds, etc.SimpleLife wrote:Welcome to the fourth page....
Living in a paid off home is hands down one of the best things you could ever do for financial security. I paid cash for my first house at 28 with money I had saved for the preceding 2.5 years and it was an awesome feeling. With a paid off house, you could work at any job and still live well since you have the single biggest expense taken care of. Your savings stretch further, and there is a general peace of mind knowing that you always have a roof over your head. It's guaranteed investment. You can always rent the spare rooms a well, so as to produce extra income. With many, this is a common back up plan in case they burn through savings and need income. You can garden, raise rabbits, chickens, etc. for food. You can drastically reduce your living expenses living in a paid off house.
In addition, now I'm not as mobile. If I want to move, I have to worry about renting it, managing it, etc. If I want to sell it, I may not get what I paid for it(this happened to me with a condo).
In addition, owning a home takes a nearly constant flow of cash for repairs, insurance, taxes, etc. that most people don't mention.
As a renter, I don't have to worry about taxes, repairs, insurance, etc. and I'm not tied down. This is especially true if I'm living towards ERE, which means I don't have a lot of stuff to store...I don't need a lot of space.
I know there are arguments both ways, but I just prefer the flexibility and freedom of renting at this point. I have enough FI to meet a rent and my monthly expenses.
While you are more tied down, that's the only real downside. When I rented, after each major repair or remodel (new roof, new pavement, new kitchen) my rent went way up. My rent actually doubled in 10 years. The owner wasn't giving me a higher QOL at their own expense just to "pass the wealth around". My rent covered taxes, insurance AND repairs.
I have two rentals and I'm sure my tenants might snub their nose at paying property taxes and insurance and think they are on the better path because "they are not paying taxes or repairs" (even though they struggled just getting 3K together to move in, so it's not like they could afford to buy if they wanted to), but at the end of the day, they still are; the difference is they are paying them for me, while their rent keeps going up and my mortgage (the one that has one) is fixed.
Part of my mortgage for my primary residence is tax deductible too, an additional benefit to owning IF you stay put or don't mind renting it out. My mortgage is fixed, and I build equity.