Always ensure that the rent or shortfall on the property you live in is well within your means . Avoid stretching your budget for the sake of living in a prestigious area or owning a home that ’ s too large for your current needs .
AFFORDABLE HOUSING
When Renting Is Better Than Buying Not all properties are suitable for investment , and in some cases , renting the home you live in may be the better option . Here ’ s why renting could make sense :
1 . Cost Efficiency If you want to live in a location where property prices are exceptionally high — like an exclusive area near top schools or business districts — it may not make financial sense to buy . Renting in such areas can be far more affordable .
2 . Capital Allocation Renting frees up capital that you can use to invest in high-yield properties elsewhere . Instead of tying up your funds in a home that doesn ’ t generate income , you can focus on building a portfolio of investment properties with strong rental returns .
3 . Reduced Responsibility As a tenant , you don ’ t have to worry about maintenance , rates , or taxes . These costs are borne by the landlord , giving you greater financial predictability .
4 . Flexibility Renting allows you to move easily if your needs change — whether it ’ s a job relocation or a desire to upsize or downsize .
Avoid Overextending Yourself A common mistake people make is justifying expensive home purchases with the belief that “ my home is an investment .” While it ’ s true that property can appreciate over time , the home you live in is often more of a liability than an asset , as it doesn ’ t generate income .
Always ensure that the rent or shortfall on the property you live in is well within your means . Avoid stretching your budget for the sake of living in a prestigious area or owning a home that ’ s too large for your current needs .
58 REI MAGAZINE DECEMBER 2024 / JANUARY 2025