Many people believe that by the age of 30, real estate is the most valuable investment that one must make. There is also the strange belief that at a certain age, one must leave the denser urban areas and move out to the suburbs.
Now, for some people, this might be the right choice, but when we look at things, you might find that living in denser areas can be linked with all kinds of benefits. So, if we were to give you the most solid reasons why renting is actually better, they are listed below.
Unfavorable Housing Market
Even if you might be ready to buy on paper, the current housing opportunities in the area that you are looking for might not be a good investment right now. Currently, the housing market is in a chaotic state as there are homes that are well over their typical value – based on the previous trends.
Mostly, homes are regularly going for five or six figures with dozens of offers in – the second they come on the market. People approach homes waiving inspections or paying all cash.
So, if you are looking to buy in a similar housing market, it might be in your better interest to cool your heels and keep renting a bit – even if it is for the short term; speaking of which, you might want to check out the short term or corporate housing in Pasadena, California, that is, if you are looking for rentals in California, Pasadena.
Typically, real estate tends to appreciate over time, which leads us to the point that paying a house more than what it’s actually worth is hardly a smart financial investment. Despite this fact, this scenario is exactly what is trending in some housing markets right now.
Also, the abnormal housing trends are making it harder for middle-income Americans to buy a house in the first place. The metrics related to affordability and income are out of sync, which is why the better option is to rent a house instead of bearing the long-term costs of buying a house.
Higher Living Costs
You might want to live in a high-end city, which is why you will need to understand homeownership and the associated costs. In the broader picture of all the things that are important to you in your daily life, there are some things that can have a massive impact on your monthly budget.
Many people in high-cost urban living markets are simply not in a position to buy a home – given the expenses for each square foot. But – when you consider all of the other savings that are possibly associated with living in a smaller space surrounded by plenty of great infrastructure, it could actually be the better choice for you to continue living in the city of your choice and putting your money in other wealth building aspects, such as investment rather than hyper-focusing on buying a home.
In general, people have the tendency to overvalue things, such as the square footage of a home and outdoor space, which often remain unused.