Stop Renting

Image of house and calculator and plans - If you can buy, stop rentingIf you are renting or leasing your home, you’re paying someone else’s mortgage. If you can, stop renting and start owning so that you are building toward your own future.

Much earlier in my career, I sold a house in Los Gatos where there had been tenants for 30 years. When the owner decided to sell the house, of course he gave them plenty of notice, but it was hard. It had been their home for 3 decades.

In those 3 decades they could have bought a house with all the rent they’d paid. No, they couldn’t have bought that house, but they could have purchased something. And after 30 years, they would have equity and either be able to enjoy a home rent free, or they could have sold it and cashed out.

It’s not easy to buy a home here: prices are high, saving the down payment is a huge hurdle, and the competition even for those who have the cash and the means is steep.  But if you choose to stop renting, at some point you’ll have equity, and if you hold the house long enough and steadfastly work to pay it off, you should own the home free and clear after 30 years, maybe less.

Tips for how to stop renting & start owning

One of the biggest shifts needed is expectations and the willingness to live in what you can afford to buy. You can almost always afford to rent something nicer than what you can purchase. For some, this is intolerable! Yes, when you buy, it’s often a step down in terms of your surroundings. Sometimes when buyers get stuck, this is the heart of the problem.

Once you’ve gotten expectations in line with what is possible, the next big challenge is putting together the down payment. It’s not easy, but people do it and not all of them have stock options or RSUs.

The down payment will require most people to do serious saving, possibly working more, or scoping out programs to help. Think “frugal mode”.

Here are a few things that have worked for my clients (or others I’ve heard about): (more…)