I am not sugar coating it this week. Not only am I a real estate nerd, I also have a huge passion for individuals building wealth. And in the United States, the number one thing that helps individuals build wealth is through home-ownership. I want you to build wealth. I want you to own your own place to live. It doesn’t matter if you want to live in a condo downtown, a townhouse in Ballard or a nice rambler in Shoreline. I want you to stop wasting money on rent and start building your long term wealth.
Now for the data:
I want you to assume that you are going to live in the exact same spot for the next 20 years. Impossible, I know… Bear with me.
Let’s assume that you are a renter and your current rent is $1,800 per month (the average for a one bedroom IN Seattle). Here is what the next 20 years will likely look like:
Yes. You will spend $768,000 in the next 20 years. To someone else. In fact, at $1,800 per month, you have spent over $21,000 in the past year in rent.
Now let’s assume you buy a place. The below scenario is if you purchased a $400,000 home with 10% down payment and had an interest rate of 3.75%:
You will have spent almost HALF as much on your mortgage as you would have on rent. Factor in the paying down of your mortgage, and the increased property value (assuming a modest 4% increase in value each year), and you will have over $700,000 in equity! (Equity is your homes current market value minus the amount you still owe on the mortgage). So you spend half as much and walk away with $700,000. Sure beats spending twice as much and walking away with nothing!
Buying a home is a big deal. It’s scary. It’s hard to come up with the down payment. I get it. But it IS possible, and it is possible for you. My inner big sister wants to sit down with you over a cup of coffee and make a plan on how you can buy your own place. Let me know when you are ready to chat.