Do you have FTHB’s complaining about todays’ “high” mortgage rates? They need to consider this.
If you are a renter how much of your monthly rent payment is going towards principal reduction? ZERO! How much of your monthly rent payment is contributing to your home’s value appreciating over time? ZERO! In effect, the renter is FLUSHING THEIR MONEY DOWN THE DRAIN!
But, they are making their landlord RICH as they paying their landlord’s principal, interest, homeowners insurance, property taxes, HOA dues, maintenance, etc for them. I love my tenants as they are funding my daughter’s college education and our retirement.
This is why in study after study by the Federal Reserve renters on average have a net worth of about $5,000; while homeowners have a net worth typically 40-50 times this much!
I have witnessed this nearly 10 times in the last 2 weeks as I have talked with many older renters. Yes, their rent payment is lower than a mortgage payment, but they have ABSOLUTELY NOTHING to show for it. NADA! NOTHING! No money in savings and no money in retirement accounts. I feel sorry for these people and the decisions they have made over their lifetimes.