Choosing Between Renting and Buying

Real estate investing can be a wise path to wealth and Invinci’s advisors can help develop a strategy to meet your goals. The question often comes up, though, about the risks of property ownership and the rewards of renting. Sometimes, yes, it might be better for individuals to rent at times and we may advise against buying.

Property ownership requires money, time, and expertise. Do you have these resources at your disposal? With enough money you may be able to do with less time and expertise by hiring others to contribute them. Cash needs may be less of an obstacle if you are knowledgeable of the real estate market, of financial analytical methods, and how to locate funding sources or partners. There is no substitute for time. It is finite. Would-be investors need to evaluate the best use of their time and how this impacts decision making between renting and buying.

Ownership comes, of course, at the price of what you give up in exchange for holding the real estate as an investment. This is opportunity cost and many new investors calculate a prospective return on investment without a real understanding of the value of their time. In fact, they may decide to input sweat equity and provide labor to make a distressed property marketable. This is deemed equity because it saves cash; what does not get counted, however, is the value of their labor (work effort X time).

Expertise is often overlooked these days as a prerequisite to ownership. Many persons hear about the opportunities to make money with flipping, wholesaling, tax liens, etc. and it sounds easy. They binge watch the home flipping television shows and it looks fast paced and glamorous. They decide to get in on the action. Jumping into real estate ownership with nothing more than a $30 guidebook titled, “How to Get Rich in Real Estate,” is foolish and likely to result in a financial loss. Your entry into ownership, and your financial gain or loss from it, will influence all subsequent buying and selling.

All the cons of investing in real estate can be considered the pros for renting and vice versa. Invinci advisors have the expertise to review your goals and able to recommend the best options for you to profit from real estate investing. We are able to assist with representing you in transactions, evaluating properties, and by providing insight into buying low and selling high. Have a plan, devise a strategy, and secure a trusted expert to consult along the way, and you will position yourself to grow your family’s wealth.