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By The Hollinger Team

Diana, Kellie, Dane, Drew and I have over 85 years of experience in Montana real estate, specializing in waterfront properties. Let’s see what we can find for you.

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Renting versus owning is a topic that comes up from time to time. Recently, I came across a study on it that’s worth passing along because the gap it shows is bigger than most people would guess.

The National Association of Realtors estimates that the typical homeowner’s net worth is at $430,000, while the average renter is at $10,000, a gap of about 43 times. Renters do build some net worth through other things, but next to owning a home, the difference is gigantic. And it hasn’t held still. Three years earlier, that same gap sat at 39 times.

Equity is what sits behind that number. Owning a home free and clear, or close to it, puts you in a position most people never get to use deliberately. That’s where it becomes worth considering a rental property. You can hold it for the appreciation while somebody else’s rent covers it, and there are some good tax considerations that go along with that. Your CPA can tell you how they apply to your situation. They’re a real part of the math.

A handful of rental homes can turn into a retirement plan. Anybody who knows a few investors in rental houses has seen it happen. One property covers a bill or two, but three or four of them, held long enough, start covering a real share of what retirement costs. Not a windfall, just property somebody bought and let the tenants pay down.

“A handful of income-generating homes can turn into a very nice retirement plan.”

One downsizing angle most people don’t consider. Say you’re ready to downsize and you have a home you’d be selling anyway. Instead of buying a smaller house, you move into a single unit in a fourplex. That’s your downsize. The other three units generate income that covers a lot of bills and helps fund your retirement. Same move, but with a different result.

None of this happens by accident. It has to be planned out and built around goals you actually set. That’s especially true for younger people, where time is the biggest advantage you have. Figure out how to find good opportunities for home buying to hold as rentals, accumulate several of those over the years, and you’ve built a real investment portfolio out of it.

I hope this gave you some good food for thought. If you have questions or ideas you’d like to share, please reach out. Call me at 1-406-837-5531, email me at ScottHollingerMT@gmail.com, or visit flatheadrealestate.com.

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