Should I Rent or Buy a Home

the IPs. This is the Affluent Entrepreneur Show for entrepreneurs that want to operate at a high level and achieve financial liberation. I'm your host, Mel Abraham, and I'll be sharing with you what it takes to create success beyond wealth. So you can have a richer, more fulfilling lifestyle. In this show, you'll learn how business and money intersect. So you can scale your business, scale your money, and scale your life while creating a deeper impact and living with

complete freedom. Because that's what it really means to be an athlete, entrepreneur. Welcome to this episode of the afternoon entrepreneur show this one we're gonna break down the American dream the American dream of homeownership, should you be buying should you be renting? Here's the thing, we're going to look at some stats, we're going to look at some data. And we're going to actually do a calculation on

rent versus buy. And we'll give you access to a tool so you can do the calculations on your own. based on your geographic area based on the house you're looking to buy, or the place you're looking to rent so you can be informed and make the right decision for your financial future. So let's get to it right now let's just look at why does this even matter? From the perspective of your

life? Well, 74% This is from bankrate.com 74% Rank home ownership as the highest gauge of prosperity, which is really interesting. The fact that they owned a home is their gauge for prosperity. And they ranked it above having a career. Okay, 60% said having a career was a measure of prosperity. But 74% said homeownership was children is down at 40%. And college

education is down at 35%. The fact is, is that homeownership is seen whether right or wrong or indifferent, is seen as one of the key metrics of prosperity in the US today. So what I want to do is kind of break down some of the aspects of homeownership, as best we can, because it's not just a money decision. So we're going to jump to the iPad here. And for those of you that are just listening, I'll describe it

to you. And we'll make sure that we can get you access to the graphics that are in play here. So we're gonna jump to the iPad and in understand the elements of homeownership go far beyond just the numbers. Now I'm going to talk a lot about the numbers here. Because the numbers matter. The idea here is this in anything that we do in the affluent entrepreneur, show my work my speaking around the country and around the world, my upcoming book, all those things.

I'm never going to tell you very rarely am I going to tell you don't do something, don't buy something. What I am going to do is say, let's make sure we have all the information. So we're making the right decisions for the right reasons based on the numbers and based on the vision we have for our life. Because for some people, they might look at it and say homeownership is the thing that we want. For others, they might say I don't need it. There's people that are living in the van live in the

van life and that's cool. That's good. I had a dear dear friend for over a decade him and his wife traveled the country in an RV He ran his business out of the RV she ran her business out of the RV. Now they've settled down they bought a home they're they're remodeling and building in Arizona and doing those

things. But understand that nothing is like set in stone it's set in stone by the vision you have for your life look, building wealth building riches building a you know accounts and having that is only for the purposes of making sure that you're living true to your vision, not not what society wants not what your parents want to know what your siblings want not not what the expectation not what the media is, what's your vision is one of the first steps that we take when we start to

work with people I work with people on my elite level or in my master's level. We're we're helping them one of the first things to do is let's define the death destination. Now if your destination includes homeowner homeownership, who am I to judge that? Okay, but understanding the numbers of homeownership becoming important in the process. So let's just look at some of the considerations that are financial and non financial when it comes to owning a home.

So, if we jump to the iPad, the first thing is this is there are financial considerations to owning the home, there's actually four different things that are categories, if you will, that I think counterplay financial considerations like mortgage, I mean, you're gonna unless your bank paying cash for the home, which would be cool to

do. You're gonna have a monthly mortgage, typically, most people are getting 30 year loans I am, I'm pushing people to 15 or 20 year loans depending on on their situation, get it paid down quicker, but at the same time, we're in a rising interest rate environment. So there may be some other issues there. But it's not just the mortgage. And this is the thing that a lot of people will forget about.

There's meanness ownership comes with some bills, you got you got, you know, the gardening, you've got the water, you've got the utilities, you've got the roof that might go bad, the leaking windows. I mean, we. So we bought our house here, right on the beach, and Laguna. And these are things that you can't make this stuff up. So we got some heavy, heavy rains air in California, the year after we bought. And we're sitting upstairs now we have this grand room upstairs that overlooks the

ocean, and everything. I'm looking at the wall, and there's water that just it's like a waterfall just coming down the wall coming down the wall coming down the wall. And I'm like going what, what is going on what we didn't realize, because you couldn't see it from the street. And the inspector never picked it up. I mean, that's a whole different discussion with the inspector and all that

stuff. But what there was, was there was a chimney stack that was at the top of the roof, right where the water was coming down. And evidently, the sellers took out the fireplace because there was no fireplace there when we bought it. But I had the old plans of the house and I saw that there was a fireplace there. What they did is they took the fireplace out remodeled the upstairs and rebuilt it, but they never took the chimney stack out or sealed the chimney.

So we have this basic bucket on the top of the roof, collecting all the water from the rain, and then letting it soak right down the walls. Okay, certainly not plan for certainly not normal maintenance maintenance. But we had to get get people in here to fix it. Make sure there was no mold, take take out the drywall, fix all of it seal the sealing cap the the chimney stack that was up there. I mean, we have since completely removed the roof and took the chimney stack away. So we don't have that

issue. But understanding that there's upkeep costs, there's taxes, okay. And here's the other thing that I think people don't realize, like, if this house were paid off, you know, yeah, house is paid off, but your real estate taxes will never go away. And so that is an expense that will be an ongoing expense over and over and over again for the rest of the time that you own the home, and then insurance and those kinds of

things. So there's financial considerations beyond just the bind that come into play that too often we don't think about and understanding what those can be becomes important in the financial decisions. So that's the first aspect or category of considerations when it comes to home. The second is that it is an investment. Okay, you are buying into a home now, I know with some of the stuff that I talk about that when I talk about assets, I talk about

investable. So when we talk about your path to financial freedom, the important thing is to build your financial freedom on what we call investable assets. investable assets will leverage your time back. In other words, the idea is this is that I want to pay for my lifestyle with income streams that are coming from assets that don't require my effort to generate the income. That way all the work I do is work optional, but not work

necessary. I get to choose each day because I have a group of assets, the investable assets that will generate the income well. When you use the definition of investable assets, those are assets that increase my net worth by providing additional cash flow. When I have access to the value a residence isn't really an investable asset because if I'm living in it, yes, it gives me a place to live, but it is not gonna I don't have access to the

value. It doesn't allow me to pay my bills because it's not generating cash flow. In fact, it is a bill it's in there. negative in there. Now, I don't mean that the house is now we'll talk about why I purchased a house why we purchased a house. That was expensive. And what was the reasons for it when we get to that point, but understanding that a home purchase for many people is the largest single purchase in their lifetime. So things like location matters.

We looked in different places we looked in Washington, we looked in Nevada, we looked in Austin, Texas, we looked in different places, but you know what my life when I like living by the beach, so we stayed here. So it's a personal investment. But there's other things that come into play. The other thing is that when you are thinking of buying a home, how long have you been in it, you don't make a home purchase, if you know you're gonna be in it for just a year or two, this is a long term

investment. So it's an investment of dollars, it's an investment of time, it's an investment in a geographic location, that the all those things come into play as, as we look at it from an investment standpoint, then the other part of it is downpayment, it's going to cost you to get into a property and you're going to put anywhere from 3% to 20%. Or more

down. Now, if it's a personal residence, I like to see people put as much down as possible, keep that home loan payment as low as possible, especially in a higher higher interest rate environment, but I get it, if you're first come into the game and you want to get into a home, it's sometimes hard to come up with a 20%. So you may have to come up with a five or 10%. And I get that's okay, as long as you have some parameters around the debt you're taking on and your overall debt that you have

and obligations on. This is why using a cash resource plan as we set it in place becomes really important to make sure that you're not burying yourself, and putting yourself in a huge amount of debt. So you have this house wealth but but cashflow poor, in that perspective. So that's the second consideration. The third consideration is this. And what I call personalization.

And what I mean by that is this, when you rent a property, you don't have the full latitude to make modifications are created. So it is your own, we went through a remodel here, okay, well, we own the place. So we could do whatever we wanted to do to make it our own. If we rented the place, we would have had to get permission, that would have been limitations, we wouldn't have been able to do some of the things that we

wanted to do. And here's the thing, a lot of a lot of leases, would require you to put the property back in its original form when you got it. So if you remove the wall, or if you, you change the bedroom, you might have to change it back. So when you own a home, you have the ability to make it your own. And there's this pride in ownership that comes into play. And then the fourth thing that I think comes into play that isn't about just the money side of it is

lifestyle. Lifestyle considerations are really important. When you start to look at lifestyle. You need to think about what really starts to drive things, renting gives you a ton more flexibility. Because you can rent for a year and decide, well, I'm gonna we're gonna take off, we don't like this area, we're gonna go to another area where you have a lot more flexibility about buying a home is a long term decision, minimum five years.

And with higher interest rates, you're looking at seven to 10 year decision that if you don't think you're going to be in the house for you know, 789 years, it's probably not going to make financial sense to do that. And you got to think about your life. At one point, you know, do you have children? Are you going to have children if all of a sudden you're getting into there's a number of these beach properties, we have one of the

larger properties here. But there's a number of these beach homes here that are literally one bedroom, two bath under 1000 square feet? Well, that's great if you're a single person or a couple, but what happens when you start having children so lifestyle considerations come play if you're a young couple and you plan on having children, you might have to grow those

kinds of things. And the other thing to realize is that the other thing happens that you have a bunch of children you have this big home and now you become empty nesters and they're gone. Now what do you do? All right. Do you need the large home or no my mom we we downsize the house because when it was just we were living. We grew up Mom, Mom and Dad we had the same house since I was born. Just the one home but it was this ranch

style. house with a huge yard, just back in the day when houses were built on top of each other, but it was, and it was an older house, I mean, they bought it in 1960, something like that 6162, something like that. So as older house had a lot of deferred maintenance that was gonna need

to be done. But it was just too much for my, you know, my mom at the time, you know, it was five years ago that we ended up selling it, it was just too much upkeep because there was too much deferred maintenance, it was too much maintenance, because it was older, and it would take a lot, and it's too much for her on the yard and all that stuff at her age. So you got to think about the lifestyle impact on that. And then the last piece of this lifestyle consideration is that location

matters. If you're not in love with the location, and you can't stomach being there, then it becomes a problem, say, the first beach house we had, we actually had a beach house, in a community just a couple miles south of us. And this was 51 homes in this community. The problem was is that the community, we didn't know this going in the community was awful. The people were awful to each other, they were all up in

each other's business. We had an HOA association that was financially not run well, we had deferred maintenance that were going to be passed through to everyone. But the biggest thing was just the nature of the people and how intrusive they were in. And everything that we were in our homes, but not feeling comfortable coming out and of the homes. And like we walk around here with Budo. And everyone's friendly, and it's welcoming, and it's enjoyable.

There it wasn't. And so if you don't love the location, or you don't love the community, or you know, those kinds of things are considerations that need to come into play. So, so buying a home, or renting a home has more to it

than just financial. Now I'm saying that, because the next piece I want to talk about is I'm going to run through some numbers and show you how I would look at buying a home simply from a financial perspective, then talk about why I still think that homeownership may be the right thing for certain people, if you do it for the right reasons and what to consider. Alright, so let me jump to the iPad, let's do some math. All right, but I'm going to do the math for you, I'm

gonna give you a tool. This is a rent versus buy template, an Excel spreadsheet, I'm not going to, I'm not going to run through the Excel, I'm going to run through a printout of the Excel that gives you an idea of whether you should or shouldn't, from a financial perspective only. So let me be really clear. When we talk about this specific piece, I am only looking at the numbers. But there are far other a whole bunch of other reasons to buy a home versus rent a home

that we will talk about. So if we're looking at numbers, only, then this is this is the way to look at it. But homeownership, especially if it's a primary residence is not just a numbers only decision, but let's just look at it. So I'm going to give you some assumptions. And you'll be able to get this tool out, we'll hook it up in the shownotes and in the description. So you can download the tool and use it for yourself

and everything. It is for education illustration, you know, look, there might be a formula error in here. Who knows, I don't know. But there is an we've checked it. So let's

just look at it. Let's assume for a moment that you're actually going to buy a home is cost $500,000, you're going to do a traditional downpayment of 20%, that means you're going to put $100,000 down if you put $100,000 down on a $500,000 home, that means that you have a $400,000 loan that you need to put in place now at the time of us recording this average interest rates were approaching 6%. So we're going to use a 5.95% interest rate for 30

years. That means that a $400,000 loan for three years at 5.95% interest rate your payment, principal and interest is $2,385 a month, okay? So that's your payment. That's only the loan. Remember there's other costs associated with so we use a 1% real estate tax. So that's another $400 a month. We used a point 6% insurance, these are national averages so they could be different in your area. So that's another $250 a month and then we estimated a repairs cost of half a percent of the value a

month another $200 a month. Now. If you're buying an older home that could be higher if you're buying a newer home, that could be way lower. So So all told, we look at the monthly cost of of homeownership in this case Ace was approximately $3,300 a month, $3,260 a month now we assumed a tax rate of 25% and an

inflation factor of 3%. Okay, so that will come into play in this next piece, because we're going to hold the home for a period of time, and then we're going to sell it and we're going to see what we get out of the sale. And I'm going to show you where I think people make the mistake in doing that, so let's say that we come down the road. And, and you start to understand that the property will go up in value, the property will go up in

value. Now we use the 6% appreciation factor, which may be a little aggressive, okay. But we assumed that we would own the home for 10 years, so a decade. And we assumed that when we sold it, we would pay 6% in selling costs, typical percentages they make it may be 5%, you might be able to get 4%, and everything. But so that means that if the property appreciated by 6%, over 10 years, the $500,000 property that you bought, is now worth 895,000, it's worth almost $900,000 6% in selling costs,

that's 50,000. So you're gonna get 841,840 $2,000 out of it, okay, but you have to pay the loan back. Now you've been paying on the loan for 10 years, the 10 years of owner owning it. So that $400,000 loan is now only only $334,000. So you still owe $334,000. So if I ended up with 840,000, and I pay back the loan of 334,000, I net money in my pocket, at the sale of the property that I bought, of $507,000. That's money in my

pocket. Now, this is where people stop, they look at it, and they say, Well, I bought the house for 500,000, I sold the house for almost 900,000, I ended up with half a million in my pocket. Now mind you, they only put $100,000 down under the 20%. So that's actually not too

bad. Okay. But if we look at the overall cost, the cost over the life of the house, you held the house for 10 years, that means you bet that you paid the real estate taxes for 10 years, you paid the insurance for 10 years, you paid the upkeep for 10 years, if we look at all of that ownership costs, because you're going to have the same costs are similar costs on the rent side to compare apples with apples. If we looked at all of that,

what does that look like? Well, over the life of the house of owning the house for a decade, we would have paid $57,000 in in real estate taxes, we would have paid 34,000 insurance, we would have done to 28,000 in total in repairs. And we would have also had cash go out for the downpayment and the principal pay down. So total cash outlay would actually be $500,000. What that really means now there's a tax savings here because the

interest is deductible. Okay, within certain limits, depending on how big of a house you get. But so the net cash is $451,000. So we got to understand what that does, because this is what we want to compare the red side to. So that's homeownership. Let's look at the rent. What happens when it comes to renting? Well, here's what we did. And these are assumptions and you can change these

assumptions. And when you get the tool you can play with the numbers all of these, these yellow boxes are where you put the numbers in all the green boxes are actual calculations. So we equated the rent to the principal and interest on the mortgage. So we said if, if the principal interest on the mortgage is 2385. Let's assume that I can rent something for 2385 So we acquit equated the rent to the mortgage payment. Okay. We used a rent inflation of 3%. So we use an inflation factor of

the same 3%. We wanted to get renters insurance, you get homeowners insurance when you own when you rent, you get renters insurance, the renter's insurance insures the contents, not necessarily the dwelling or the other structure, because that's on the landlord, but when you own the home, you want to insure the structure as well as the content so it's a little different, but we said 1.3% So your total rent cost monthly rent costs at the beginning is

$2,400. And at $2,400. What ends up happening is if we look at the 10 years of rent costs, and present value it, then that's $337,000. Now remember, our total cash outlay on the ownership side is 451,000. But you also have the ability to take the difference in your home ownership costs, and invest it if you rent. Now, here's where

the problem is. Most people don't do this, where renting starts to make more sense is if you're disciplined enough to invest any savings between ownership and renting into investments, so you can get all that investment growth over the same time period. Okay. But if you just go spend it, ownership is going to be better because it's a forced savings account. Okay, we'll talk about that in a

second. But But here's what ends up happening with this is that, that the difference just in gross numbers, is homeownership costs 450,000. But renting only costs 337,000. So there was a savings of $100,000. Okay, if I, if I saved 100% of that, that means that I don't make a down payment of 100,000, that's going to grow. And the savings on a monthly basis between the rent and the homeownership is going to be invested, and that's going

to grow. And so if we assume that, that you have an investment return of 8%, long term. Now, these are all assumptions, you can change the assumptions. So I'm gonna give you the tool to fit whatever you think is going to happen. And you use the same investment period of 10 years, if I hold the home for 10 years, I'm renting for 10 years, what you'll see is that the value at the end of the period of your investing is $332,000. Whereas the net value of owning is

really only $50,000. So there's a net benefit to renting in this scenario, by almost a by a little over a quarter million dollars. This is where we start to look at things that God does it make sense? Well, it does, because of other purposes, other reasons. And so I'm not telling you not to buy a home, I'm telling you to be smart about why you're buying the home, where you're buying it, how long you're in it, make sure you

understand the numbers. Now if you just look at and say I'm gonna just not worry about the monthly costs and the accumulated costs. Yeah, homeownership starts to make a whole lot sense. But but every year, there's costs to owning the home that need to think every year there's cost to renting. And if you're comparing those costs over long period of time, depending on the differential, it may make sense, but you need to invest the savings amount to make that happen now. Am I telling you not

to buy a home? Absolutely not. So hear me clear. We bought a very expensive home. Okay, well, relatively expensive home. Okay. And people would ask me, you are the one that says you want investable assets? Why would you sink a lot of money into a home that isn't an investable asset, this is going to give you a return? Well, here's why. First things first, like I said, it's a lifestyle decision. We purchased this home one, we

bought it at a great price. I mean when I mean immediately upon closing, we could have sold it and made made a bunch of money. Okay, so negotiating the purchase money on the on real estate is is made on the buy side, not the sell side, what I mean by that is negotiating the proper purchase price. And the proper terms is more important than the sales side of it. Okay, so we were able to get into this

house. In fact, both our beach houses were able to negotiate really, really good prices and terms to allow us to get in and put us in a good financial position. So that was one piece but more importantly, this was an asset. Now every asset just like every dollar, it's why we use a cash resource plan has a job description. This was an asset that didn't have a job description that was requiring it to be an investment. This had a job description that was requiring it to give us quality

of life. We bought this and we didn't over encumbered ourselves we'll talk about those limitations in a moment. We could we could easily make the the debt service payment of the loan payments, we can easily afford the rest of it. What that's that's not the issue. But I remember seeing walk the house The sparkle in my eye in Stephanie's my wife's eyes when she stood in the kitchen, when she stood in the grand room looking at the ocean, and the

joy and just how it felt. And that's when I knew that as long as affordability made sense, in the overall plan, we needed to buy this house, not because it was an investment, but because it would shift the quality of our life to a place where I could give her something that she enjoyed, that she had a chance to make her own, that she has a chance to call her home, her, her castle, whatever. So this was a decision that wasn't meant and made just on the numbers that we just walked

through. So I want you to understand that sometimes we make the decisions. But it didn't put us in jeopardy, we still follow some some financial rules to make it make sense. So why do we pay we consider buying, because there's other reasons to buy one is savings. Okay. And what I mean by this is that indirectly, as as you pay down the mortgage of the house, and put on that the possibility of appreciation of the value of house, indirectly you have this

built in savings plan. It's a forced savings plan, because as we build the equity here, we've got we got money that we can't access now we would have to either refinance, or sell it to get access, which means we got to find another place to live a whole nother conversation, but it doesn't. Second is it gives you predictability, you know where you're living, you know what you're in for, you know, what, what, what your mortgage is, every month unless, unless

you're on a variable rate. And if you're trying to get into a variable rate mortgage, you and I need to have conversation, especially in a rising interest rate market, it gives you the freedom to do what you want to the property, okay? Is we have the ability to remodel and do it the way we want to decorate it the way what we're not limited in and renting, it gives you some level of stability, a home

base from which to operate. A place where you can call your own, a place where you can call your home, a place where you can lay your head at. And I know you can get that with renting. But this becomes more of a permanent feeling. You don't have the well I'm I'm renting a place, and I got a two year lease and and rents are going to go up 10% 20%, whatever they are, and we've had high rent increases in certain rental markets over the over the last couple years. You have this stability, if you

will, that stays in place. And 30s are the next thing is that there's there's some pride in ownership. This is our Welcome to our home. I don't think you can say, and you can't put a price on he can just tag numbers to it. So I'm trying to balance the numbers part because if you look at numbers, it's an easy decision. But there's more to it. It's what went into us buying this house. And then the last piece is, is taxes. When you purchase a home, there's some tax

benefits. There's limitations to some of the tax benefits, but you get a deduction in the US for the mortgage interest, the interest portion of the loan up to a certain amount, you get a deduction for the real estate taxes, again, up to a certain amount. You one of the big tax benefits is that as long as you use the home, for a personal residence, a primary residence for a certain number of years, out of five years, two years out

of five years. If you sell it, you have the opportunity to not pay tax on up to half a million dollars in gain. If you're a married couple 250,000. If you're single now, that can change once if they change the tax laws are those limits. But think about this. If if we sold if I bought a house for four or 500,000 and I sold that house for 800,004 years later, five years later, eight years later,

500 to 800. There's a $300,000 gain, okay, that I would have to pay tax on if it was was not a primary residence, the $300,000 gain could be a tax of as high as $100,000. But since it's a primary residence, we pay zero tax on it. And you can do that. Every handful of years. There are people that actually buy primary residences, they stay in it for for three years and then they sell don't pay tax in the game and move to another one. It's not it's using the tax for some people might say oh, you're

taking advantage of it. Well, no, the tax laws are written that way. A. So using the tax laws, the way they're written, I don't, there's no crime. And no one says that you need to overpay your taxes, you just need to pay your taxes in accordance to the tax law that is in place. If they don't like it, they can change it, they changed the previously, there used to be a different law and in the 80s, they changed it to this. So it's one of the

benefits from ownership. So what are the things that you need to do, I think there's some things to consider if you're thinking about buying or renting, and I'm going to walk you through what I think are the eight considerations to move forward. And the first is, is to really look at this. If you're thinking of buying a home you're living in it needs to be minimum, five years or more, I'm gonna say

seven years or more. Number two, I want you to run the numbers, I'm gonna hook up the template, the tool, the buy versus rent tool for you in the description, and in the shownotes. So you can get access to it totally free, you can run the numbers, you can look at the numbers, you can

make the decision, okay? Number three, if you're buying a home, I want you to look at your total homeownership costs, that is mortgage, that is insurance, that is principal that is taxes, and make sure that they know do not exceed 30% of your income, do not exceed 30% of your income. Okay, if you go beyond 30% income, I think you're putting yourself in, in a place of financial, not Jeopardy, but exposure, okay, we don't want it to be more than 30% of income.

Then number four, I want you to make sure that you know why you are buying or why you are renting. Okay, it's a personal decision, you'll look at the numbers, you'll make the decision. But there's other qualitative things that we talked about. But make them make sure that you know, why is it it shouldn't be because someone else told you you should, it should be because it fits into the vision for your life and the things that you want to accomplish in your life. That's

it. Number five, I want you to optimize your credit, I'm going to do a whole nother episode on credit reports and credit. But what drives it how to make sure you manage it properly. But you want if you're going into a purchase decision, and even a renting decision, because they'll pull credit reports on renting to, you want to make sure that you optimize your credits, that means make sure you're making your payments on time, make sure that you're not

carrying too much debt. Okay, they look at the ratio of of available credit to how much credit is drawn. So if you have available credit of 10,000, but you're you've drawn 7000, I'm gonna get and say 70%. And this is, this is a risky play. So you want to optimize your credit, because the higher your credit score, the lower the interest rate they're going to offer you and trust me. Mortgages are

negotiable. I've negotiated all of my mortgages with specific terms and conditions, I have some very specialized terms on the mortgage on this house that allows me to do some things that other people that take the mortgage off the shelf the way it's offered. Don't, okay. You also want to look at this. Since it's a long term decision, you're going to be in a place if you buy say seven years or more assess your job security and if you're married your your spouse's job security, what are

you trying to accomplish? What are you trying to do? Is there some some issues? What do you have as far as a peace of mind fund emergency fund? Do you have the liquidity to sustain yourself? All those things that start to come into play need to be assessed here. Number seven, is I want you to plan for deferred maintenance. Uh, we know that there was another chimney UPS up top, we didn't know we were gonna get the leak. That cost a bit to get fixed. You need the plan for deferred

maintenance. All right. And number eight, oh my gosh, always always getting an inspection. This is something that a lot of people weren't doing when you know, people were buying in the homes and they were buying things sight unseen, an uninspected underpriced. That's a recipe for disaster. Look. We paid to have a home inspection on this home and the inspector missed the fact that there was two chimneys on the roof instead of one and only one fireplace inside the house. Now, could we

go back to the inspector? Yeah. But the cost of dealing with that was far greater than the cost of just fixing it and getting on our way and say shame on us. We should have known better. Okay. You couldn't see the other chimney from the street, so we couldn't see it. So always get an inspection make sure For that it is a good inspector that does a detailed look at everything, don't get into the emotional play of

buying a home. Because you start to chase it, buying a home becomes emotional because all of a sudden, you you picture yourself in it. And when you picture yourself in it, now you get attached to it, and you will chase the home price. Now before you go in, and I can do a whole session on negotiating, I do a lot of negotiating. But before you ever go into a transaction, or even think about making an offer, you actually have to draw the line in the sand and know what your

exit point is. And you say, if it crosses that line, I'm out and walk away. You have to strip the emotions away from the buying decision. Otherwise, you tend to make a bad decision financially when it's an emotional decision. So those are the things that I would consider. I'm not saying that homeownership, homeownership has its costs homeownership has has its benefits. Rent has its costs, and its benefits. Also, you got to look at what it works

for your lifestyle. If you have more transient lifestyle, a less stable job assessment, or you don't know exactly where you're going to land or you know that you might have to upsize, downsize. Maybe Maybe ownership isn't the plan for you, because that's a long term game. And getting in and out of homes is costly, because it says five to 6% selling costs. So it takes time, it takes a holding period, and there's cost to get in and out. Whereas rent, you're in it for a year, two years, whatever,

and you can move on. So if you're not sure about your job, or if you're not sure about the geographic location, you're not sure about your your life's future where you want to be. Maybe homeownership isn't the place for you. So I want you to use the tool to look at the numbers. But I want you to also use introspection, retrospection and understanding of what's your financial vision? What's your, your vision for your life? What kind of lifestyle you want? Does

it fit? Does it make sense and make it for the right financial reasons? And the right qualitative reasons? homeownership, homeownership can be wonderful, in the right place with the right people to build a life and do the things that you want to do. It can be horrible. If you don't have that, renting

can be just the same. So you now have the ability to run the numbers, you now have the ability to look at some of the qualitative things do the right thing for your life, your vision, and your future. Alright, I hope that you found this a value maybe it gives you a little bit of shining the light on what to do if you're thinking about owning, or

renting. And if you have questions or if you have anything that comes up around this or any other financial topic, reach out to me go to ask Mel now.com and send me your questions. We'll get it on on a future episode a future show and make sure that that we get an answer to we might even reach out to you and bring you on the show and coach you live. All right. I hope that you found this value and as I always say, always, always strive to live a

life that outlives you. I look forward to seeing you in an upcoming episode on the show or on the road. Thank you for listening to the affluent entrepreneur show with me your host Mel Abraham. If you want to achieve financial liberation to create an affluent lifestyle, join me in the affluent entrepreneur Facebook now by going to melabraham.com/group and I'll see you there.