I know that we, as business owners, put a good amount of our money back into our businesses. Our business is typically where all of our cash flow is going and...that makes sense, right? To reinvest back into the success of your business! Homeownership is another place of building wealth, which is often associated with the American dream and success in the US.
This decision to own versus rent is totally specific to each person and their own lives, goals, where they live, etc. and we’re not discouraging home ownership AT ALL, but let’s eliminate the shame and stigma around renting and REWRITE the narrative.
We spoke to some real estate investors that buy and sell multifamily dwellings and we got into a conversation about the misconception of renting. They themselves rent and Alex and Tori are currently renting, so they got into a discussion about why they do so. As investors, some of the reasons why we ourselves are renting had to do with the current housing market (high prices and high interest rates), but most of it had to do with the inability to access the equity in smart ways as you are paying your mortgage for the home you are living in.
One thing about living in your biggest asset is that that asset is inaccessible until you either sell it, take out a HELOC, take out a loan, or do a reverse mortgage. So although you are paying yourself while living in it and building up your equity, it’s tough to access. So what these real estate investors are doing is investing in properties outside of their own homes, increasing their cash flow by collecting rent, and if they wanted to they could sell the property without upending their personal lives and having to move their family out of their home and into a new one. So we can think about this as something business owners are doing too. And really own the fact that renting is OKAY.
I encourage you to keep your eyes on your own goals, lives, and know that even if your friend from high school is buying a home, you do not have to choose to feel behind the eight ball because as Morgan Housel author of “The Psychology of Money” states, “everyone is playing a different game”.
And only YOU have the power to say you are choosing something for yourself.
You can confidently say yeah I want to buy a home eventually, but at this point I am choosing to rent.
And why are you choosing to rent?
- Maybe you don’t have the amount you want to have to put down as a down payment.
- Maybe the timing isn’t right for your personal life.
- Maybe you like the area in which you’re renting and that’s the only way you can afford to live there.
- Maybe you want to live in a specific school district for your kids, but cannot afford to buy.
There are many reasons to choose to rent, but remember to choose this for yourself, instead of feeling a lack of power in your current state of life.
Working Toward A Goal Of Homeownership:
Meet yourself where you are today AND find professionals who will meet you where you are today.
As you're beginning your journey toward homeownership, it's important to surround yourself with financial professionals. Partner with a realtor and a mortgage lender that will meet you where you are at and help you create a plan that works for you.
You can also work with a financial advisor who will help you stabilize, build your emergency fund, and ensure you have a plan for future home repairs you might need to fund on your own.
Build a network of professionals with you to know what steps YOU need to take to work toward your goal in the context of your business.
If you want guidance with your financial mindset, your financial plan, or want to be connected to a mortgage lender, broker, or agent, schedule a meeting with Tori or myself! We got you.