Buying vs. Renting

Description

Welcome to the Making Margin podcast! Greenway’s team is here to discuss common financial mistakes and to help you navigate them.

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Today’s topic is all about buying a home vs. renting a home.

Last week the updated S&P CoreLogic Case-Shiller home price index came out showing the change in home values for 20 major urban areas. Charlotte is one of the 20 cities listed, and over the last year had the third biggest home-price gains behind only Phoenix and Tampa. The weakest markets were SF, Chicago, and NY.
Over the past year, home prices in charlotte rose 4.76% as of October (data delayed by three months) and over the past 5 years, Charlotte home prices have average annual returns of 5.3%
Nationally home prices have risen an average of 4.75% per year over the past 5 years
Zillow and other sites have made accessing an estimated home value much easier, but it made us re-visit the question: when does it actually make sense to buy a home, if ever?

Discussion topics:

First home purchase. What made you decide to buy? What was the process like?
Our favorite unexpected maintenance stories.
When does it make sense to buy vs. continuing to rent?
10-year returns of residental real estate: 4.08%. 10-year returns for global commercial REIT index: 9.31% (as of 12/31). Global stocks (MSCI World Index) averaged 9.47%. Is a home actually an investment? Should we view it that way?
If it’s a terrible investment, what is it?

Take Away: Buying a home can be wonderful, but renting can be as well. What makes the most sense for your specific situation?

Home repair budgeting resources: