Most people believe that owning a house or houses is always an asset. However, this isn’t necessarily the case. For those who are looking to grow their money, there’s a big difference between buying a home in which you live and buying a rental property. One takes money out of your pocket and the other puts money into your pocket.
Liability
When you purchase a house to live in, you’re responsible for all of the costs associated with ownership, such as mortgage payments, insurance, repairs, and upkeep. This can be a sizable amount of money every month, and it’s money that you’ll never see again. Additionally, if you need to sell your home for any reason, there’s no guarantee that you’ll make a profit. In fact, you could end up losing money if the housing market takes a downturn.
versus
Asset
On the other hand, when you purchase a rental property, someone else is responsible for covering the costs of ownership. As the property owner, you collect rent from your tenants every month. This rent covers your mortgage payment, insurance, repairs, and upkeep, and anything left over is pure profit. Additionally, if you ever need to sell your rental property, you’re almost guaranteed to make a profit thanks to the appreciation of real estate values over time.
So if you’re looking to grow your money, buying a rental property is a much better option than purchasing a home to live in. Not only will you have a steady stream of income coming in every month, but you’ll also be able to capitalize on the appreciation of your property over time.
Do you currently own a rental property?
What has been your experience? Let us know in the comments below.
