The unruly advice to the “rent vs. buy” a house debate

Gary Johnston, creative real estate investor and teacher said this in an email to his list the other day:

{
Own or rent…

The daughter of a friend of ours recently graduated from physician assistant school and returned to her home state with her husband. While they are currently renting, they are starting to thinking about buying their first home. The natural progression after you graduate from college, right? Purchase your first home and put down some roots. The problem is the area they are living in, like most areas in the country, is experiencing really high real estate prices. My advice to them is to rent not buy right now

}

He goes on to say how it’s a good idea to take this to a smaller level as well; to rent a boat, a camper, etc rather than buy a boat or RV.

That is great advice right there.

And that is the battle I’ve been hearing my dad and co-workers for years now, “why are you wasting money on rent when you can pay the same amount in a mortgage?”

Well, the truth is where I live, my mortgage won’t be anywhere near my rent. I’d have to pay $1,500 more a month on mortgage.

And, my answer to “Well you can move Eastward where houses are cheaper” is… “I love where I live. And my next move is out of California not into a CA home where I’m stuck there for the 10 years”.

On top of that, I’d have to plop down (I’m guessing), $50,000 to get the mortgage down to a reasonable level that I can afford.

So this is my unruly answer to the opinionated horde of naysayers: “Why I on earth would I pay down $50,000 on an expense, when I can pay that same amount into an asset.”

And don’t think twice that a primary residence is an asset just yet. Sure, it can be an asset in 5-10 years from now during an up-market when you sell… but you’d have to wait a few years and have the right timing.

Right now, we are in an up-market. (you know the ole saying, “buy low sell high”)

And, during those first 5 year while you’re waiting, 80% of your mortgage goes into interest anyway, not paying down the principle.

So, that is my addionatinal .02 cents to Gary Johnson’s $5 advice….

I can throw $50,000 at a bank just to afford a mortgage where I’ll be paying the interest for the first 5 years and stuck in that location for 10…

… or I can buy 2 mobile homes (or one more expensive one) where I can create a note that produces $800-$1000 a month of income (not expense) .

And onto the unruly pitch…

If you’d like to learn about how to create this income with that money you’re about to plop on down a huge expense…

I have the eBook on mobile home investing here: http://clicks.aweber.com/y/ct/?l=It3XC&m=gdk6nzu0UreKTA6&b=wgpg3gxfvoJ59Xs734kkxg

p.s. The flag ship product with Andy teaching his Wobbly Box Class as well as some audio interviews with other mobile home experts will be coming out in a month or two.
Paul do Campo’s views and opinions do not represent the opinions and views of any speaker of MMTNG.
16059 Begonia Ave
Chino CA 91708
USA

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