To Buy or to Rent?

Today I was thinking about how expensive homes are getting. If I were in my late 20's or early 30's which is probably the time in our lives when we first think of buying our first home, I wouldn't know what to do? I would be terrified of the idea of taking on a mortgage. I know so many people who lost their homes during the financial crisis. The housing market seems like it isn't the sure thing everyone said it was back when I was looking into buying my first home. I wonder if homeownership really all it's cracked up to be? And what should young adults do when they already have student loans to worry about?

I remember vividly in 2007 when I told my little sister Mari to hurry and buy a home before they kept going up and up. I said " the housing market always goes up" This was obviously not a good advice since she purchased a home for over $300 K that she can't sell ten years later for half of what she paid. She actually stills owes more than what she can sell it for.

However, even thought according to economists it costs the same to rent than to buy, in the long run, I still think a young couple should invest in a home to get a sense of being established or you are vulnerable to whatever the Landlord decides to do and sometimes they need you out of the property because they decide to sell or like what I had to do with my home in Mill circle where the renter had to leave the home to make room for my daughter to move in.

There are pros and cons of renting or buying. Both are equally the same expense since for example as a landlord I have to invest in paying for things like insurance, taxes, interest, and all the maintenance and repairs, I just got a call from the people who are tenting our home in Lehi to tell me that the garage door's spring broke off and needs to get repaired and that is not covered buy our Home warranty insurance and this is when it gets to be a pain to be a Landlord. Homes get old and they all need maintenance. The Lehi home is now ten years old and things will start to get broken. The people who are renting our home in Lehi are taking good care of it. The minute they leave, we might sell it too because we hate for someone else to come and trash it.

When you buy, you need to take in consideration closing costs, HOA expenses, etc,  In the end it is about the same. The key is to buy low and sell High but that is always a gamble. My father used to say to never sell if you don't have to because in the end the homes pay for themselves and many people have done well doing that. It becomes like having a little business. That is if you like the Real Estate business and take the heart out of a home and treat it as an investment and sometimes its hard to think that way. Our home in Bountiful our home and it feels terrible when we have people who don't take care of it the way they should. Lucky for us, the people there now are doing a better job and the home does look good but as soon as they finished building their home, we might sell it too.

What makes a good investment is to buy in the best possible area of town where prices of homes don't depreciate in value and to wait as time passes by even when the market takes a plunge because it will eventually go up in value if the home is located in a desirable neighborhood. Location, location, location!  I purchased a home 21 years ago on the East side of Salt Lake by beautiful parks and canyons known as Millcreek and that home finally is now ready to be sold. I had to wait all these years to be to make a profit as I sell it.

You can't buy a home and expect to sell it within a year to make a profit.  I sold a home for the same as I purchased it back when the market was depressed. I should have kept it. I really didn't have to sell it and today that home would be worth six times more than what I sold it for and not only that, but all these years, it would have given me a positive cash flow. Selling at buyers market was a mistake. Only sell when is sellers market. Only buy when is buyers market. That is what I recommend. I hope to buy another City Creek apartment when we sell our home in Mill Circle because it is cheaper to buy a one bedroom and rent out two separate units than to buy a two bedroom. We have Elder Carl Cook leasing our beautiful apartment and that is the biggest blessing.

Con amor,
Vero