Home Ownership & Wealth Generation: Should you be renting?

A recent study has suggested that renting an apartment can make you more money than owning a home.  As shocking as this may sound, a thorough review of the data, reveals you should take your time before doing anything drastic.

A Revision of the American Dream of Homeownership,”published in 2017, does not outright tell us that renting is more profitable, but sobers us with the fact that property appreciation is not as wealth generating as we have come to believe.

pexels-photo-572056.jpegHome owners tend to accumulate wealth more than renters, now, due to the accumulation of a strong down payment for a house.  From saving for a down payment to switching to home ownership, owners generate wealth easily while renters do not.

The study however, suggests that renters who invest in the stock market could easily outperform homeowners that do not.  “When you assume that those monies are reinvested at a rate of return, renting, on average, wins in terms of wealth creation,” states the study’s authors.

Also noted by the study, is that “the difference in wealth between renting and owning can be most affected by choices within the scope of the individual rather than through the impact of exogenous market variables.”


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