Comments from Mitchell Levy on Home Ownership

Comments from Mitchell Levy on Home Ownership
Excerpts from Radio Interviews

Hello, this is Mitchell Levy, President & Founder of Myth Breakers, located in Cupertino, California (USA). I want to comment on a myth in American society that has segmented the populace.

The myth is that owning a home is an absolute path to financial independence.
As a result of this myth, there is a large amount of pressure put on the populace to own a home. If you rent, you are made to feel like a second-class citizen.
I think this is wrong.

DOES IT MAKE SENSE TO OWN OR RENT?

There is not a 100% correct response to the question of whether it makes sense to own or rent. There are both financial and emotional reasons to purchase a home. These reasons vary between individuals and families making it a very personal decision which must be made on a case-by-case basis. What I'm trying to do is enlighten the American public by providing a set of tools that the individual can use to "help" them make their own decisions.

These tools are both a book and a spreadsheet. The book should be in your local book store, if it's not, please ask your book store to order it from their distributor or you can order it from the Consumer Advocate Corner. The spreadsheet can be ordered directly from the Consumer Advocate Corner, but it is not needed to benefit from the ideas contained in the book. The book will enlighten the reader on their current notions of home ownership, renting and saving money. The goals of the book are threefold:

Put a rational approach back into home buying
Break the myths of home ownership
Stop renters from feeling like second-class citizens

WHAT ARE THE MYTHS YOU DEBUNK IN YOUR BOOK?

That one is better off because they pay less in taxes
That one is better off because they are paying money towards equity vs throwing it away
That housing prices always appreciate

PLEASE EXPLAIN YOUR RATIONAL APPROACH TO HOME BUYING?

I'm not saying that the American Dream of owning a home is going away, it's alive and well. What I think has happened, is that we've corrupted that dream with the appreciation we've seen in real estate over the last 20-30 years. The American Dream of home ownership is documented back in 1862 in the "Homestead Act", which said "A family head can own a 160-acre parcel of land if they clear it and improve it and live on it for 5 years". There's no mention in the Homestead Act of selling it for a large return!

WHAT ARE YOUR THOUGHTS ON RENTING?

There's nothing wrong with renting, the only point I need to make is that it's important to save money. There is a difference between the stream of cash that leaves your pocket to pay for a home versus the stream of cash that leaves your pocket to rent. As a renter, you should be saving that difference, that's your equity.

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