While many advise young individuals to avoid renting and to instead buy a home, Kevin O’Leary, star of ABC’s “Shark Tank,” has a different approach to figuring out what’s best.
O’Leary suggests that those in their mid-20s ask themselves several questions before deciding whether to buy or rent a home.
“Are you married?” asks O’Leary. “If the answer is no, rent.”
“If you’re married, do you have children? No? Rent.”
The Canadian businessman advises that those who are ready to form a family look into purchasing a home. “You’re going to be raising your children and you need a safe place for them. And that’s the time when you think about buying a home, assuming both of you have a job and you can afford to pay the mortgage.”
O’Leary also states to avoid attempting to pay for a home that’s too costly, the mortgage payment should come out to only one third of after-tax income.
“Don’t let it get more than that or you’ll find yourself in financial stress.”