June 15th 2023
Many years ago, when I was in my early twenties and living in Montreal, I had a friend, still at home, whose parents were renters. They had always been renters. They always would be renters. One day the dad made a rhetorical statement by saying to me “you take a paper and pen and show me how anyone is ever better off owning than renting.” Of course, he didn’t want to be shown. His mind was already made up. But let’s take his situation and look at it for a minute.
Back then he was living in a flat in a triplex. The building itself was worth at that time less than $100,000. And his rent would have been just over $100/month. Today that rent would be well over $1,000/month and the building would sell for around $1,000,000. Had he bought then, both the rent and the acquisition cost would have effectively been frozen in time. Not hard to see how and why an ‘owner’ comes out far ahead of a ‘tenant’ in the long run.
But people in general don’t see that. They look at the situation as it stands in the present and compare it to the past, but while they can always look back, they have a hard time looking ahead.
I had a lawyer friend of mine tell me one time “Wayne, I should have done what you did. Bought property back when they were cheap.” The idea being that 
looking back those were real opportunities. But those days are gone. Those opportunities are lost. But the reality is that, yes, compared to today, those opportunities of yesteryear were fantastic. But at the same time, compared to tomorrow, the opportunities of today are fantastic as well.
I hear people today saying “with the price of housing today, how are young people ever going to afford to buy a house? Ownership for them is now out of reach.” I’ve had the opportunity over the past few years to travel to a few different places in Europe and Asia. And each place I go, I ask the locals what an ‘average’ home price is, and what an ‘average’ wage is. You know what I’ve found out pretty well without exception? Beijing, Bangkok, Rome and not just capital cities. Bedroom communities as well? Prices in most of the cities of Europe and Asia really are out of reach. I was in Napoli (Naples), Italy recently. I asked the guide, “what is an average home cost here? Can you get into a starter home for $500,000 U.S.D.?” She said, “maybe or maybe a bit more.” “And what for example would a teacher earn?” I asked. “Between “1,000 and $1,500 U.S.D. per month” was the reply. So, try purchasing a starter home for over half a million dollars on an annual salary of less than $18,000 per year. Folks by most world standards, we’ve got it pretty good. I remember as a kid hearing about how people in Europe and the U.K. were paying $3.00 for a gallon of gas. Wow! Now we pay over $6.00. Inflation. Rent and it’ll kill you over time. Buy, and especially being a rental property and inflation can be your best friend.
Compared to the guy who rents all his life, owning your own home is a wonderful way to get ahead. Your equity just grows and grows. But to release that equity you need to sell. Can you imagine how much better off you’d be if you owned more property than just your home? Not only would your equity grow on multiple fronts, but you’d also enjoy passive income, growing passive income, and not have to sell anything to get at it.
Get in the game today. Yes, there were fabulous opportunities when you review the past. But one day in the future, you’ll realize looking back that fabulous opportunities were available to you today. Don’t miss out.