A recent
article that appeared on Nasdaq.com addressed the
issue of whether it is best to buy or rent in today’s real estate environment.
The article was very fair in discussing both options. However, there was one portion of the article that
we questioned. One of the experts was quoted as saying:
“For
some people, the choice is very clear: Buying a home can be more costly, given
the cost of the purchase itself, plus taxes and insurance, plus maintenance and
repairs.”
This argument is often made in defense of renting.
However, we don’t believe it makes logical sense. They claim that, as a renter,
you won’t have the expenses of “taxes and insurance, plus maintenance and
repairs”. Do they really believe that the landlord pays all those expenses
for their tenants?
The vast majority of landlords own rentable real
estate as a form of investment. As any other investor would, they expect to
make a return on that investment (ROI) - otherwise known as profit. In
order to make a profit, the landlord needs to include EVERY expense they incur
into the rent…AND THEN ADD A PROFIT MARGIN!!
We think it is incorrect to advise a prospective
renter that they won’t have the same expenses that a homeowner would have. They
just pay those expenses to a landlord with a “premium” built in.
No comments:
Post a Comment