12/18/2022
In my last post I got an important question and I thought that the answer would be interesting to a wider audience, so I decided to repost this answer as its own post:
We always tailor our solution to our personal circumstances and needs. Obviously, if my budget for housing is ~1,000$/ months, I will not try to buy a Million $ mansion, nor will I try to rent one for 5,000$/ month. So, letโs try a small exercise. Let's assume that I love an urban lifestyle, with cafes right on my street and groceries at a walkable distance. I can't afford to buy a house in the downtown, but I might be able to rent a condo, not a large one, but suitable for a couple with no kids (let's assume we are not talking about one of the top super expensive cities). At the same time, I might be able to find a house, maybe a bit further in the suburb or countryside, or even in a different state that sells for ~200,000$. If I manage ~40,000$ down payment, my mortgage payment would be ~1,100$. With rent of ~1,300$, the renter covers my mortgage and expenses, I gain ownership equity in my own house, all the while living the lifestyle that I enjoy and paying the ~1,000$ rent that I can afford.
Obviously, not always this rosy scenario can play out easily. Sometimes we will need to save for quite a while for the down payment itself, sometimes we live in high-cost areas and no matter what, it is difficult to come up with a scheme that we can afford. However, through the years of my life experience, I learned that there are much more options out there than we can see at the first glance. While not always we will find the one that works for us, it is always worth to try and explore, more often than not we can be surprised for the better!
This is not a substitute for a financial advice. I recommend to always consult with a professional advisor that is familiar with your personal situation.
