I've written before that it's almost always smarter to buy a home rather than rent and have noted that oftentimes homeowners get rich and renters stay poor. However, there are times when it is better to rent than buy a house. The Motley Fool offers these thoughts that show buying a house isn't always the best financial move:
- Sometimes, home values do go down over time. A home is not always a winning investment.
- It can be good to think of your home not as an investment, but as shelter. Cost-effective shelter, perhaps.
- While that 30% savings may not always ring true, it's bolstered by deductible property taxes.
- Renting can save you from spending gobs of money on home repairs, home improvements, and even impulse spending.
So yes, sometimes it's better to rent than buy. But in most cases, buying will be better, especially if you follow my formula for buying a house.
This is the one main knock I have against the book The Automatic Millionaire Homeowner. The book indicates that it's ALWAYS better to buy and that's simply not the case. That said, I did like the book and gave it a good rating (you can read my review here) because it does contain many good principles about home buying and ownership.
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