Rich renters

When the booming real estate markets in both Canada and the United States came to a peak in 2007, many home owners made a smart and courageous decision. They decided to sell their current homes, making a 30-50% profit that they put into their own pockets. Rather than buying a new house with the profit, they held onto it and decided to become renters once again. This may seem counterintuitive to some as the cry is always to own your own home, but the reality is that you can get rich a lot faster by being a smart renter.

Renting was given a negative stigma awhile back and therefore many people are shy of it, but it can result in some really great things in the long run. There are a lot of misconceptions and considerations surrounding being a renter, such as:

1. Consider this example–if your monthly rent is $1600, you can own a home with a mortgage payment in the same amount of $1600. This is the biggest mistake for first time home buyers. There is way too much money you have to pay by owning your own home than you can imagine: property tax, insurance, mortgage insurance, and maintenance.

2. Your house is an asset. The house is not your asset while you are living in it. Your house is the bank’s asset. What is an asset? An asset is something that is putting money into your pocket. Your house is an investment but not an asset until you sell it and make a profit.

3. The biggest myth of all–renters are poor. While it is true that there are poor people renting, but there are also very smart and rich renters out there as well. Those people know what they are doing and why they are renting. Some renters own a whole bunch of rental properties, while other renters enjoy less work and live better as a renter.

So the next time you hear that “the very best investment is to own your own home”, rethink this theory. If you are in a position to hold onto your money and spend less per month by renting, then by all means look into what this can do for your budget and your investment potential. I personally associated with some smart rich couples. Instead of getting their own money stuck in their own residential house, they actually have them stored and work through rental properties and other investing vehicles. It works for them and it could work for you too. You truly can be rich renters and defy the negative stigma that renting is given. This can work for you and if you find a rental property that works well for your housing needs, you can end up with a beautiful home, some great investments, and extra money in your pocket.