Pay yourself first: OWN instead of RENT

Posted by on Mar 19, 2015 in Blog

I have listened to some people passionately express satisfaction with paying monthly rent and gaining the related offset by using it as a business deduction.  An expense.  The ideas that expensing rent is somehow a way to reduce tax burden.  My opinion is simple – Hog Wash.

Why would you give money away to someone else each month.  Consider this:  when you own, buy, or purchase there is an interest expense deduction, a depreciation deduction and the best news – you pay yourself each month.  The principal paid each month is a payment to yourself creating equity buildup.  Each month over the life of a note, the principal paid to you increases. Google the words, amortization schedule, and play with the amortization calculator, you will find that each month the payment you make increases to you and is reduced to the bank.  Wow – you get to make more money each month.  What a great idea!

Consider owning instead of renting because the advantage is also very simple – in roughly 12 years, the note duration, you now become the very happy owner of your own building.  What a great way to create equity and personal wealth.  Consider buying instead of renting… it makes good cents.


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