Is it OK to be a renter?

As a Realtor®, I'm always encouraging people to buy real estate after all, it's the quickest and safest path to gaining long term wealth, but is it still ok to rent?  Over the last several years, renting has become somewhat of a stigmatized word but the answer is YES, of course it's ok to rent, not everyone is in a position to buy.  But I am going to attach a couple of conditions along with that statement that it's ok to rent.

First, renting should always be viewed as a short term step in the path to actual homeownership.  You must have an exit strategy while renting and you must make sure you stick to it.  Whether your renting for 1 year, 3 years, five years or even 10 years, you must make the transition into homeownership a reality at some point if you want to gain long term wealth. 

Second, you can not waste that time while renting and you must put it to god use. Use that time to put together a financial plan, some goals along with a budget and also set a target date for you to exit the rental world and purchase a home of your own. Also, use this time to pay off debt, save for a down payment and improve your credit score if needed.  And when you are ready to buy, buy!  Don't let whatever the market conditions look like at that time deter you from buying, the sooner you get into the game the closer you will be to long term wealth. 

In a study done in 2019, the average net worth of a renter was $6300 while the average net worth of a homeowner was $255,000, that's a staggering 40 times more wealth for a homeowner vs. a renter and 100% due to them owning a home.  So with that in mind, of course it's ok to rent but I would encourage everyone to work towards home ownership.

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