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Posted 8 November 2020
Nobody said it’s wrong to own a home. There are benefits to owning a home. When you own a home, you own the mailbox, garage, and you get to enjoy your privacy. Yeah, you might not like the sound of someone hitting the walls. That could be a good reason to buy a house. Privacy is expensive. Look at the airlines; when you are flying private, you pay more.
If you have the money, go for it, buy a home. There’s nothing wrong with doing that, but if you want to save money for a business venture, then you don’t need a house; you can rent.
Renting is affordable; depending on the area, you can pay as little as $1,000 a month, while in other areas, a lot more.
As a business person, you know that what makes a business go under is usually the lack of funds and concentration. If a company doesn’t have enough money, there’s a high chance it will surely defunct. That’s why you need to save money so that you have something to fall back on if this happens.
Buying a home is very expensive, and it can even take you years to pay off. If you purchase a home, you won’t have enough money to save because of the mortgage.
There’s a stage a business gets to, and you’ll begin to get so many clients/customers, but you need funds to meet their needs. Funds are very crucial to the success of the business. A business can have rough months, or even years, but can still survive because of money in the bank. Yes, you can borrow money, and of course, you know that when you do this, then you have to pay back with interest.
Sometimes these venture capitalists and investors demand a percentage of your business. So, before you raise money, you need to ask yourself if that's the best option for your business.
Having a home requires attention and can easily distract you from achieving your dreams. When you buy a home, your concentration will be on maintaining it, and you will keep checking to see if it has gone up in value.
Yes, it’s good to figure out ways to save your business money, but having something go up and down in value is not suitable for you. You should focus on growing your business, and when your business grows and makes you money, you can buy a house.
Below are reasons why you should rent and not buy a home:
1. You can move at any time
Yes, you signed a lease with your landlord, but that doesn’t stop you from moving. You can negotiate with him/her. Some people think if they just move out that it could affect their renter’s history. Most people lease properties for a year or two, but you are in it for 30 years if you buy a property. And of course, you know what happens if you don’t pay your mortgage.
As a renter, some apartments or landlords will let you lease for six months. If you no longer want to leave there because of your job, you can either wait or move to a new location within that time frame.
2. Fixing the house
Oh no, the insurance will fix it for me! Good luck with that. Most insurance companies have already outlined what can pay. Most of the time, you’ll have to go out of pocket to fix most damages. But if you are a renter, you don’t have to disturb yourself. As long as you are not at fault, you won’t pay a dime. Make sure you read the lease agreement to understand what the landlord wants from you when damages happen.
Your landlord or management can indeed fix and make the property look nice, and after that, they’ll increase your rent. Even if they do this, you are still better off renting than buying a house.
Imagine if there’s a flood or any natural disaster, even if the insurance will pay for the damage, imagine the headache. You are better off renting so that in case these things happen, you can move to a new location.
3. It’s hard to sell a home
Buying is more comfortable than selling. Yes, if you walk up to these real estate companies, they already have homes on sale. However, some of them are getting smart; they only build when they have a buyer, reducing the homes’ risk of not selling for many years.
You might be new, and let’s say you bought a house, and you paid it off. Now you don’t like it anymore, things have changed, and you want to move. Yes, it’s gone up in value. Alright, try listing it, and let’s see if you’ll get an offer. Oh, you got an offer, but it’s below market value. Alright, go ahead and contact an agent because it took you six months to get to this point, and you don’t want to wait any longer. They asked for a commission! Of Course, they did; they have to make money.
Alright, the agent says everything looks okay, and within a month, it’s back on the market. Now you waited a month, but no buyer. Hey, I got the best agent! Well, there’s no doubt about that.
Your agent comes back in the third month and tells you that your home isn’t selling because it needs some upgrades, especially if you want to sell it at market value. $10k - $20k will be the cost. Of course, what did you expect? It needs some upgrades.
Many people pass through this kind of back and forth when they want to sell their homes.