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In aYouTube video, he gives advice and discussesthe pros and cons of buying and renting a home.
Reconsidering the Popular Mindset
Most people have heard the conventional wisdom on renting vs. buying.
Theres a widespread perception that renting a home amounts to throwing away money since youre not building equity.
By extension, buying a home is seen as a wise investment.
But, as always, you should be cautious about accepting popular views.
Even though there can be some truth to these statements, its not the entire picture, Stephan said.
Thats why its important to drill down and consider the true financial cost of each option.
The Cost of Buying and Owning a Home
Calculating homeownership costs is a complex operation.
Its not just a matter of the monthly mortgage payment.
Stephan points out theres also an opportunity cost to buying a home.
For example, imagine you buy a $400,000 home with a $40,000 downpayment.
Stephan calculates opportunity cost at 6%, meaning youd lose $200 monthly.
The Financial Benefits of Homeownership
Are you overwhelmed yet?
In addition to the cost considerations, Stephan wants you to consider the financial upside of homeownership.
After all, buying a home isnt all cost and no gain.
Buyers can enjoy:
The Cost of Renting
The cost of renting is extremely easy to calculate.
Renters are responsible forone monthly charge.
This brings you back to the big question: Is it cheaper to buy or to rent?
Should You Buy or Rent?
Stephan feels it all boils down to your timeline and your values.
In the long run, homeownership does make financial sense.
But homes take at least a decade to appreciate enough to make it asound financial investment.
If you plan to live in your home for less than 10 years, renting will save you money.
But if youd like to live in your home for at least 10 years, then ownership is smarter.
Its also a question of what matters most to you.
If you want and value stability, owning a home is priceless, Stephan said.
Whatever your choice is, be smart, crunch the numbers and listen to your values!
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