The Emotions Of Buying vs. Renting
I’m stunned by what I’ve just read; all I can say is WOW!
Recently, the blogosophere has been on all cyclinders talking about buying vs. renting, and many calculator spreadsheets have also popped up. But my vote has to go to Julie Ali who is guest-blogging at Jim’s Blueprint for Financial Prosperity. Her writing is absolutely terrific in its depiction of the emotional issues of buying vs. renting.
[...] There is a rental cycle that is the diagrammatic opposite to the house buying cycle. When people are madly engaged in a love affair with the purchasing of their first, second or final upscale home, they turn their nose down at even the mere plebeian thought of dating a rental house. Even the sensible arrangement of renting for a few years in order to acquire a down payment for said house is refused. “Why should we make the landlord richer?” they sniff as they run to their local banking casino of choice and throw down their chips to lose a fortune on the turn of the mortgage interest wheel. [...]
Julie hit it right on the nail with that assessment. When you hear diverging opinions about the same topic at different times, which one is right? During parts of history, the popular thing may be to buy your own house because everybody “feels” it is the affordable, sensible option. Renters are frowned upon and treated as if they have no common sense. But for those times when nobody wants to enter the real-estate market, and renters may choose from the multitude of vacancies, what do you think they will say? “It’s better/more economical to rent?”
How About Buying To Rent?
This is where Julie is earning more bonus points! She’s already won me over by her excellent story about cyclical attitudes towards renting vs. buying a home. But Julie pours on the heat by allowing us to peek into her vault of experience. She dispels a few myths about being landlords when most of us “ordinary citizens” don’t have the slightest clue of what it takes to make it work. It is like joining the army with visions of protecting your country, only to find out that you cannot even do 100 push-ups. But like the push-ups, if you stick to it, experience may turn in your favour due to your perseverence.
Why Am I Making A Big Deal?
I always fall in love with financial explanations that transcend the numbers. It isn’t always about numbers in finance! Julie’s common sense perspective can be easily understood by everybody; those who are number-savvy, and those who aren’t. It’s one of the reasons I love quotes from Warren Buffett. It’s about common sense and an open mind to see both sides of the story! Julie is showing us what she’s learnt from her own experience! You simply can’t buy such self-less advice (with no hidden agenda) from books, gurus, or your financial advisor/real-estate broker.
