Quote:
Originally Posted by Randall55
There are good reasons not to pay cash for a home but rent instead.
1. You can invest the money you would have used to pay cash for a home. The interest earned can be used to help pay the rent. This will reduce out of pocket rent expense.
2. No additional costs. Property taxes, insurance, bond, amenity fees, lawn service etc. cost an additional $1000+ a month for homeowners.
3. Easy living in an apartment. No time spent on mowing the lawn, gardening, bug control, painting/spraywashing, the house etc. etc.
4. When an appliance, roof, carpet, flooring, etc needs replaced, a homeowner must pay for it. A renter does not have this expense.
The question is: Will you earn more money investing in a home or investing the cash?
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I need to take issue with your post. I have a courtyard villa and my monthly cost to move into The Lofts would triple. I have done the math down to the penny, having lived in the villa for 7 years. The costs you cited are all included in my calculations. I pay someone to do all of the landscaping, so I have no maintenance work. My total cost per month for all of the things you mentioned is less than $900 per month, not $1,000 plus. Yes, you do earn interest on the money in the villa, but, you need to also consider the annual increase in the value for the villa, which is a wash at best. Also, the interest on the value of the villa is taxable income, but the income from an increase in the value of the villa is tax free because it is your primary residence.