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  • Ryan O.

There's No Place Like Own


It's a great time to buy. I've represented over 5 first time buyers this year. Stop renting your future away! Here are three reasons why owning is better...

Invest In Your Future

Real estate is an investment. Putting your money in a mortgage allows you to build equity. In addition, your home could appreciate in value.

When you pay rent, you're paying someone's mortgage. Let's say your rent is $2,000/month. That's $24,000/year and $48,000 over two years. $2,000/month might be within your monthly budget, but it's important you see the big picture over the long run.

Predictable Payments

In places like metro Honolulu, it's almost expected that your rent will increase. When you have a mortgage payment, your payments are fixed. Your first payment is the same as the last payment. However, if interest rates drop, you can refinance. By doing this, your monthly payment can decrease.

Owning Real Estate Is An Inflation Hedge

Generally speaking, the cost of goods usually increase over time. For example, a gallon of gas cost more than it did 30 years ago. Since your mortgage payments are fixed, owning real estate hedges against inflation.

Say you own an 1-bedroom condo in Makiki. When you purchased the property, your monthly mortgage payment was $1,400. After a few years of owning it, you decide to rent it out since you just bought a house.

You find a tenant and you charge $1,600/month for the first year. When the tenant renews his/her lease, you increase the rent to $1,650/month. You continue to do this every year. Although you're charging more rent, it's important to remember that your monthly mortgage payment of $1,400 has stayed the same.

-Roda

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Ryan Oda (RB-23073) is a Real Estate Advisor with Forward Realty (RB-19423) in Honolulu, HI.