To Rent or To Buy…That is the Question?

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To rent or to buy, that is the question. Before becoming a real estate agent and new investor, I always thought buying was costly and that renting made the most sense. After reading, Rich Dad Poor Dad by Robert Kiyosaki, I took the time to reexamine my thought process about buying a home. Like most people, I was told by friends and family that buying in an area where I wanted to live made the most sense if I planned on staying and had enough money saved. People think you need 20% down in order to purchase a home, which seems like a lot and almost impossible to save for, but what most people don’t know is you might only need 3.5% — 5% down, depending on the loan. Also, like most people, I did not want to listen and believed my thought process around renting made the most sense. My original philosophy was renting made sense because I could always break a lease for a few months of rent, I could move if I didn’t like a place after 12 months, and renting was cheaper than buying. Rich Dad Poor Dad flipped my thought process upside down and it forced me to look at a home as an investment instead of a ball and chain weighing me down. Although having a mortgage is a liability because it’s debt, it can become an asset if it generates income. For example, buying a 3-bedroom home and renting 2 bedrooms to friends is a great way to build wealth while turning a liability into an income-generating asset.

Liability to Asset Example:

Formula: Mortgage (Your Liability) — Room Rent (Income from Home) = $$ staying in your pocket

Math: $1,800 (Mortgage) — $900 (Room Rent #1) — $900 (Room Rent #2) = No $$ out of your pocket

With the example above, you now have your mortgage paid and have the ability to pay down the principal to increase your equity or invest in another income-generating vehicle. There can be a case made for renting or buying but listed below are a few steps to help get the juices flowing.

The List:

· Get Educated — Read Rich Dad Poor Dad or The House Hacking Strategy by Craig Curelop

· Ask Questions — Call me — 215–645–7327 or email me at

· Set a Budget — Decide if you will buy or rent based on what you have learned

·Test the Waters — Check out places to rent and buy — See what grabs your attention

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