Here’s a quick story that illustrates why you should buy instead of rent.
Should you rent or buy? We’ve been asked this question countless times, so today we’ll answer it by sharing a case study with you.
In 2005, we received a phone call from a friend who wanted advice about their housing situation. We set up a meeting and soon learned that they were considering buying a house, but there was a catch. They were living in a rent-controlled apartment in Marina Del Rey, and they were paying less than $800 per month for a two-bedroom property. Essentially, they had no motivation to buy.
Owning property is the best way to build long-term wealth.
Despite this, I let them know about a great place just in case they were interested. They decided to check it out and ended up loving the property. Not only was it a four-bedroom home in a fantastic location, but the price was an absolute steal. Initially, they didn’t want to buy, but they kept coming back to the house. Of course, they ended up buying it.
A few years later, they wanted to move to The Valley for a career change, and they called us to help. This was a complicated transaction since our market was so crazy at the time, but we secured them a great deal. They then used the money from the sale to buy a $700,000 house. Today, that home is worth $1.4 million.
Even though their initial rent was so cheap, buying that first home allowed them to afford their second house. Now they have a ton of equity they wouldn’t have otherwise. The main takeaway is this: Owning property is the best way to build long-term wealth. You can invest in the stock market, but diversifying your portfolio is the best way to protect your investments.
If you see a home you truly love, our advice is to jump on the opportunity. Give us a call or send us an email if you have any questions; we are always willing to help!
