Why owning a home is better than renting.
Reading the up to date news articles of the time will give you great insight into the emotional state of the market. A broad glance is essential because it will show the overall market mood.
At the bubble top you will notice many or most articles raving about the large gains or fortunes being made in the areas in question. There will likely be TV shows about the subject showing how seemingly regular people make fortunes off of it.
This is largely because if everyone knows something, there is no more money to be funneled into the system and the enormous game of musical chairs comes to an end. If everyone knows about something, and even novices to the subject are making a killing then there is no more potential for growth and the music stops.
The bubble will burst as they all do and on the way down take another look at those headlines. They will all likely project tremendous fear. You will know the bottom is likely near when the fear subsides slightly and only a feeling of remorse or despair remains.
Just like how when everyone knows that something is good, there is no more room for growth. Well, at the bottom of a market crash there is ONLY room for growth. Right now we are in a period where the despair is dying down, but people are still either too scarred or too poor to do anything. Many people want to buy but cant because they cant afford it.
In my opinion the choice should be obvious when you compare renting to buying. When you rent, you pay money every month to someone but you don't have to worry about maintenance. They take some of the money to cover expenses, some of it to pay off debt and the remainder is either a profit or a loss. This is not including the effect a change in market price will have on equity.
While it is true that when you first buy it is probably going to be more expensive. Those monthly payments will go down eventually when you compare them to the rapidly rising cost of renting. You also will likely need to fix many things after you first buy. These costs will subside after while if you maintain your property properly.
You will build up equity in your home that you can use to remortgage and do what you want with. This will give you some flexibility later in life. At a market bottom you can still probably rent for cheaper than you can buy. The difference is that when you rent, your landlord will attempt to raise your monthly rent by $50 or so every lease renewal.
You will be rewarded if you own your home and take care of it. Over time, owning your home will become relatively cheaper because you just pay roughly the same amount each month with little increase.
Over the course of your lifetime you will likely have paid off your home loan or built up considerable equity. If done right, your payments will likely have stayed almost the same over the course of your ownership. However, had you been renting the entire time, you would have no equity and you would likely be spending a lot more on rent.
At the bubble top you will notice many or most articles raving about the large gains or fortunes being made in the areas in question. There will likely be TV shows about the subject showing how seemingly regular people make fortunes off of it.
This is largely because if everyone knows something, there is no more money to be funneled into the system and the enormous game of musical chairs comes to an end. If everyone knows about something, and even novices to the subject are making a killing then there is no more potential for growth and the music stops.
The bubble will burst as they all do and on the way down take another look at those headlines. They will all likely project tremendous fear. You will know the bottom is likely near when the fear subsides slightly and only a feeling of remorse or despair remains.
Just like how when everyone knows that something is good, there is no more room for growth. Well, at the bottom of a market crash there is ONLY room for growth. Right now we are in a period where the despair is dying down, but people are still either too scarred or too poor to do anything. Many people want to buy but cant because they cant afford it.
In my opinion the choice should be obvious when you compare renting to buying. When you rent, you pay money every month to someone but you don't have to worry about maintenance. They take some of the money to cover expenses, some of it to pay off debt and the remainder is either a profit or a loss. This is not including the effect a change in market price will have on equity.
While it is true that when you first buy it is probably going to be more expensive. Those monthly payments will go down eventually when you compare them to the rapidly rising cost of renting. You also will likely need to fix many things after you first buy. These costs will subside after while if you maintain your property properly.
You will build up equity in your home that you can use to remortgage and do what you want with. This will give you some flexibility later in life. At a market bottom you can still probably rent for cheaper than you can buy. The difference is that when you rent, your landlord will attempt to raise your monthly rent by $50 or so every lease renewal.
You will be rewarded if you own your home and take care of it. Over time, owning your home will become relatively cheaper because you just pay roughly the same amount each month with little increase.
Over the course of your lifetime you will likely have paid off your home loan or built up considerable equity. If done right, your payments will likely have stayed almost the same over the course of your ownership. However, had you been renting the entire time, you would have no equity and you would likely be spending a lot more on rent.
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