Tuesday, June 22, 2010

 
This infographic states right out that it is better to rent for 4-5 years than buy a house, which I patently disagree with! I think that if you were going to buy and own a house for a few years, then sell and rent again, it would be not such a good idea to buy. But if you want to buy a house, live in it for 2-5 years, then sell and move into a bigger house or more desirable area, then go for it! That's how people make money in real estate. The longer you own a home, the more equity builds up, unless you bought in 2007 at the top of the bubble! The more equity you have, the more cash you get back when you sell, which you can invest in a large down payment on your next home, or in a remodeling job. If you sell in less than 2 years you do have to pay capital gains tax, so unless you are flipping a home for an extremely large profit it's not really worth it. The majority of home owners are able to afford larger and nicer homes as they move up because they started with a small house, it gained equity, and then they kept moving every 2-5 years, sometimes very frequently, sometimes only 3-4 times over 40 years. The point of home ownership is too be able to do what you want in you house, which you cannot do in most rental situations. Disagree? Comment below and I'll respond!

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