Home News Self-made millionaire Chris Hutchins on buying a home or renting

Self-made millionaire Chris Hutchins on buying a home or renting

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Most Americans who bought a home since the beginning of last year are having second thoughts.

According to one study, about 31% of home buyers in 2021 and 2022 said they had to pay more than their asking price to land their home. A recent study by real estate data firm CleverAnd 72% of recent homebuyers say they regret their purchase, due to financial and other factors.

But even if you regret it or feel like you paid too much for a home, many financial experts would say owning a property is better than renting it. Chris Hutchins, founder of the financial planning firm Grove, says it may not, depending on your financial habits.

A self-proclaimed “life hacker,” 38-year-old Hutchins has been virtually unemployed since age 30, but continues to gig full-time in addition to hosting the Life Hacking podcast. “all hacks.”

He’s a homeowner, but he doesn’t think you have to be to be financially successful. “So many people think buying is a once-in-a-lifetime financial decision, but you don’t have to own a home,” he says. I think.”

Here’s why he says that depending on your financial situation, you might regret buying the house rather than continuing to rent it.

owning a house is more expensive

It’s not hard to see the benefits of home ownership. In the long run, if you diligently pay off your mortgage, you’ll build an asset in your home and own it outright. And if the asset value rises in the meantime, you can finally get a high return.

On the other hand, rent payments don’t build anything.

All things being equal, mortgage payments help build wealth more than rent checks. But Hutchins points out that not all are the same.

For one, homeowners must have homeowners insurance. According to the latest data, the average annual cost for him is $1,272. Insurance Information InstituteAverage annual cost of renter policy: $174.

Also, homeowners must pay property taxes. State average annual property taxes range from $606 in Hawaii to his $5,419 in New Jersey. According to Rocket Mortgage analysis.

Also, if you own a home, if it breaks down or needs updating, it’s all your responsibility. “Even in our new home, the water heater broke. We had to pay for the washer/dryer, plumbing, repainting, resanding, and refinishing,” says Hutchins. “This is something you have to take care of as a homeowner, but not as a renter.”

After giving the down payment, that’s all. Standard expenditure: 20% of the value of the house.If you go in below, you will have to pay extra cash private mortgage insurance Monthly until you build 20% equity in your home.

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