I heard some financial advice today on how people should only buy a home if they can actually afford to buy it outright. For example, actually save up one million dollars versus trying to buy it now with a mortgage. I believe the topic came up because of all the news of the increased of interest rates. Essentially, it’s the mindset of it’s better to rent. Normally for small items I would agree such as the general practice of only spending what you have with a credit card. But a home is different in many ways as it can create so much benefit if you can make it work.
My parents actually bought a home with a mortgage versus renting when I was a kid and they always told me how proud they were in being able to pay it off fairly quickly. One way this was done was that the basement was rented out to a couple and we lived on tr main and top floor. For the most part it worked out well. I actually never thought about the financial reasons why there were people living in the basement funny enough as a kid. They never had to actively look for tenants either as it as the same couple. Eventually the couple moved out and by that time there was no need to rent it as the mortgage was paid off.
So growing up with that viewpoint made me see how it can be better to get your own home versus just renting. I think the main scenario where it may not be a good idea is if you are buying the property with a mortgage and the sole intent is to rent it out and have those funds pay for the mortgage. That may be riskier as you now would have to scramble to find tenant. If you actually lived on the property then that would be different.
I think the important thing too on why this worked for my parents is that they were able to pay the mortgage without the rent money. So that made it even more practical to get the house while significantly helping to pay off the mortgage. It would have been a mistake to not get the home for this case I feel.