Pros and Cons of Renting vs Buying A House 2021 | Should You Rent or Buy A Home In Hawaii?

The age old question, should you rent or buy a house in 2021? Which is better? We will discuss the pros and cons of renting vs buying a house and analyze a home in Hawaii to see the results! Add me on instagram: @kikoga

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So lets discuss some pros and cons of renting a home and buying a home when it comes to real estate:

For renting, pros are that you have mobility. You can make a lease month to month, yearly, etc. and can pick up and go according to that deal. This works well if you travel a lot for work, or just don't want to get tied down to one place. To keep buying a selling a home usually isn't profitable after all the closing costs and real estate fees that you have to pay for each transaction. Also as a renter, you don't have to deal with the repairs if you don't want to; that responsibility falls on the landlord. And renting doesn't require a huge downpayment like home ownership; you can just get right into renting, move out, and start living your life and use your savings to invest elsewhere. However, renting has its cons in that your entire rent goes to someone else, none of that goes towards your net worth. And also you don't control your monthly rent, your landlord does and likely the market. Also if they need to sell the property, you will be forced to move.

For buying a home, pros are that you build equity in the home with each payment. Part of your mortgage payment goes to principal (direct payment to the loan) and part goes to interest (fee for getting the loan from the lender). This means that essentially part of your monthly payment goes back into your pocket and into your net worth. Also as a home owner (and real estate investor) you become the beneficiary of home appreciation. In Hawaii, over the past 20 years, home prices have been increasing on average 5.5% per year. So as an investment this is pretty good and will outpace inflation. You get no benefit from the market while renting. Also, your mortgage provides a guaranteed monthly payment for 30 years. Also, owning a home also allows you to have options for home renovations to improve equity and home value, and you can do the ultimate trick in real estate investing and rent out your property to someone else who pays your mortgage and costs and builds equity for you. Cons are that you need a lot of money for a house downpayment especially in Hawaii, and that money can be used and invested elsewhere. Also you own the risk of property depreciation.

In our example, you'll see that if you take straight rent and straight monthly costs of ownership (mortgage+maintenance+insurance+property tax) renting is cheaper than owning. However when you take into account your built equity from your mortgage and tax benefits from deducting the interest, you come out on top. Once you take home appreciation into account, in the long run, buying always seems more beneficial than renting. Make sure you run the numbers like I did in this video to make sure your real estate deal truly is a good real estate investment and can help build your wealth!

0:00 Intro
0:53 Pros and Cons of Renting a Home
2:36 Pros and Cons of Buying a Home
6:38 Renting Vs Buying Example!
10:55 Other Things to Consider...
12:12 Concluding Thoughts

Song: MBB - Hawaii
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Video Link: https://youtu.be/DdHHXQOIM3k

Видео Pros and Cons of Renting vs Buying A House 2021 | Should You Rent or Buy A Home In Hawaii? канала Kienen Koga - Engineering & Finance in Hawaii