While buying a home can certainly be a wise financial decision, consider how renting can be an alternate path to wealth.
The top five cities where it was cheaper to rent versus buy in 2023 were Austin, TX; San Francisco, CA; Seattle, WA; Boston, MA and Portland, OR.
I live in Charlotte, N.C., and I could buy another home on a 30-year mortgage for cheaper than what I rent right now. But it would require me to move 20 to 30 minutes away from my current address, where I have the accessibility to restaurants, entertainment, and shopping within walking distance. I sold my last home largely because location and convenience mattered to me more.As a business owner, renting has been a huge time and money saver.
In 2020, we bought a second home in the mountains, a small condo to escape from the city. By 2021 it was also paid off and we officially passed $1 million in net worth for the first time, with the two homes as our biggest assets. What I didn’t expect: Even though we had $1 million in assets, we had very little flexibility with the equity tied up in the properties.
Ultimately, we decided to sell both homes and applied the proceeds of those sales toward other vehicles such as dividend ETFs, Treasury Bills and REITs. Those investments now offer us similar monthly cash flow that we can move much more easily than having to sell properties. I prefer the flexibility we have in moving our net worth, without affecting our living situation, as new investing opportunities arise.
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