What if you discovered that real estate is a poor investment, contrary to popular belief?

The majority of individuals are ignorant of the additional expenditures associated with purchasing a property.

Here is the truth about whether buying or renting a property is preferable.

Beware of property-related propaganda

Have you ever considered where your opinions regarding owning versus renting a home originated?

This is a topic worthy of a moment’s consideration. Because the reality is that many people decide to purchase homes based on societally-imposed belief systems.

By rewarding those of us who own homes and viewing renters as failures, our peers perpetuate this perception. It’s all nonsense.

To determine the source of this idea, we must examine who is financially motivated to encourage us to purchase homes. The solution is straightforward. It is the greedy members of the National Association of Realtors.

They want you to purchase, so they generate persuasive propaganda that offers themes such as “real estate prices can only rise.” They will even assert that when the market rises, it is a good time to purchase, and when it falls, it is also a good time to buy.

Wait… you’re saying it’s ALWAYS a good time to invest in real estate? That is just false.

However, they are not the only ones incentivized to encourage you to buy a property. Our own government is likewise accountable. They offer tax deductions to entice you to make this excessively expensive purchase.

Two deceptive misconceptions are propagated by these propaganda engines for the sole purpose of lining the coffers of those who profit from our purchases.

Buying vs Renting Myths

Let’s examine a couple of these myths and the reasons why they can lead you astray.

Myth No. 1: If you rent a home, you are simply paying your landlord’s mortgage.

This misconception has caused so many people to purchase a home before they were ready because it leads them to believe that someone else is receiving a better deal. This fallacy stems from a misunderstanding of the profitability of real estate.

Some individuals believe that being a landlord entails owning a property that costs around $3,000 per month, then adding 10% to the rent and laughing all the way to the bank.

This is not how things work.

Your landlord may charge you no more than the market would sustain.

Therefore, sometimes the landlord earns more than their expenses, but most of the time they don’t even cover their costs. And you wish to know the most insane part?

The majority of them are unaware of it.

This is due to the fact that running all the calculations and tallying all the expenses can be extremely challenging. These are known as phantom expenses. How do you compute the cost of repairing a roof that costs $25,000 and occurs once every 20 years? That is difficult to compute!

Just keep in mind that your landlord can only charge you what the market can tolerate.

Myth No. 2: If you pay rent, you are wasting your money.

This is one of those phrases that sounds nice but has no practical meaning.

So renting implies I’m wasting money with no tangible return? Because I have a roof over my head and a wonderful view when I pay rent. Rent provides a roof over one’s head. And this is the case while purchasing virtually anything.

When going to the movies, you spend ten dollars and see the film. What can you demonstrate for it? Your only evidence is that you enjoy the film.

When you purchase food, what do you receive in exchange? A great dinner!

The same holds true for rent. You are paying for a service and receiving precisely that service. It’s that straightforward.

Do the math before you buy a house

As long as you buy for the proper reasons and are prepared, there is nothing wrong with buying a home as opposed to renting, despite the negative tone of this essay.

You may desire additional space for your increasing family, or you may wish to complete projects such as demolishing that kitchen wall. These are all excellent reasons to own a home.

But regardless of your justification, be sure to do the math.

It is helpful not to view your home as an investment, but rather as a component of your Rich Life. This perspective can help you make decisions, such as the purchase of a home, for the correct reasons and not the wrong ones.

And if you are a renter reading this essay, you are fortunate! One advantage of renting that I omitted to mention in this essay is the ability to negotiate the monthly rent amount.