September 2026 - Money Machine - Home Sweet Home

On a couple of different occasions over the past few weeks, I have come across articles written by different financial advisors and investment specialists advising people to NOT own their own homes, but rather to rent. Their argument quite simply is that for the money you have invested in your home, you would be better off owning a multi-family building, which would give you a better return, and since you decided to and will continue to put your money into high-return investments, you simply don’t have money to waste on home ownership. You should rent. While I can appreciate where they are coming from, I think it is absolutely terrible advice for a number of reasons. Your home provides great quality of life I’ve been in my current home for about 40 years. Today it doesn’t look anything like it did when I bought it. I’ve fully renovated it inside. Added a great room with a vaulted ceiling and a stone fireplace. A drop-dead gorgeous study/den beneath. Put a pool in the backyard. It’s more than comfortable to live there. But none of those added amenities would be there if I were a tenant. I’d still be living in the house that was, not the house that is, and missing out on quality of life. Inflation is my friend As a tenant, inflation is my enemy. Why? Because my rent keeps going up. When I look at past records and see what typical rent was 40 years ago and what it is today, I can hardly believe it. But as a homeowner, I don’t look at the rise in rent; I look at the increase in home values. The purchase price of my home 40 years ago wouldn’t cover the down payment today. And all that increase in value is an increase in my net worth, dollar for dollar. That wouldn’t be the case if I had elected to spend my life as a tenant. Equity take out From the day I buy my own home, every mortgage payment I make reduces the principal amount of the loan. It isn’t too long before I have amassed significant equity in my home. I can take a lot of that equity out by way of refinancing my mortgage, and then use that released equity as a down payment on another investment property. I couldn’t do that if I was paying rent instead (although the landlord could). And as an added bonus, the interest I pay on that increase in mortgage amount is tax deductible. Home ownership as a stepping stone to investment While the above-mentioned financial and investment advisors can argue that if I’m busily and prudently putting my money into rental real estate, which provides a better return, I’ll never have the spare money to buy a home of my own, they are incorrect. I encourage first-time buyers and young people starting out to make their first home acquisition a multi-family building. Either a duplex or a triplex. Now, with the added revenue coming in from the rental units, they can set aside the down payment for their next home (possibly a single-family), and when they buy that one, they keep the one they are in as the first investment property of their investment portfolio. Now they have the best of both worlds. A homestead where they can raise a family and forge a lifetime of memories, while at the same time they are building an investment portfolio which will one day not only supplement their income, but provide them with an amazing flow of passive income for retirement.