On the internet you can find every type of article. Why eggs are good for you and why they are bad for you. Evidence taken from the same studies but with different points of view. This is true about every topic imaginable. What about real estate? Is real estate really a good investment and why do so many people choose to never buy a house?
What you will find is a lot of people who are in a city telling you that real estate isn’t what it’s cooked up to be. They will tell you that it is actually cheaper to rent and that the equity you build is nothing compared to being able to skip town on a drop of a dime.
And in many areas of the country they are right. San Francisco for example has average rent of a 2BR at $4126/month where the average 2BR home value is 1.2Million. That is a mortgage payment of roughly $8,000/month including property taxes. So buying in San Francisco was a good investment in the past but being a new home owner will cost you almost twice as much as renting.
How about in Huron, South Dakota? Is it really a good investment?
Here are the numbers: Rent for a 2BR is around $600. You can buy a investment quality 2BR home for around $45,000. The mortgage, plus property taxes for that is around $330. But you wouldn’t buy a investment quality home. You could afford $82,000 home for the same monthly payment of $600/month.
Houses in that price range have a lot more going for them. Many have 3+ bedrooms and garages.
So, even though it is true that in many parts of the county buying a house isn’t worth it, that isn’t the case for Huron. You will be living with a lot more for your money AND build equity.