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In the long run, buying a house and a car is usually more cost-effective than renting a house and a car. Many families use the method of renting first and then buying. As a result, they pay two or three times as much as they directly buy computers, furniture, televisions and other household items. It is wiser to save enough cash to buy computers, furniture and televisions than to rent before buying. But sometimes it’s more economical to rent.
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Here are some examples.
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1. Boat chartering: Unless you live on a boat every week and are sure that you often take a boat, you can rent a boat for one day or one week every year; There is no need to buy the boat and show off at home 355 days a year.
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2. Rent a campervan: Unless you plan to live in a campervan (if you do, I’m a little jealous, and my wife won’t allow me to do so), renting a campervan is enough; There is no need to buy one, just park outside for a few weeks every year.
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3. Rent All Terrain Vehicle (ATV): Unless you live in the suburbs and can drive ATVs almost every day, it is enough to rent ATVs once or twice a year for the weekend. You don’t need to drive into the garage, decorate the driveway in front of the door, or pay more for parking in other places.
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4. Renting hotel rooms and condominiums: Most middle-income people do not need to spend money on timesharing. It is much cheaper to rent hotels or condominiums for several nights. In my experience, those who spend money on timesharing are rich people who have time to travel around and can afford all these privileges. For others, it is wiser to find a place to rent a few nights.
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You can decide whether to rent or buy according to the following two basic principles. If one of these conditions is more favorable for buying something, consider whether to buy it.
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1. Frequency of use: If you can reasonably plan to use something regularly, such as a house, car, and beloved socks, it will be cheaper to buy them than to rent them for a single use, and it will be much more cost-effective in the long run. If you only use it occasionally, you’d better rent it. Rent it for a period of time to see if you really need it, if it is not used as often as you want, and then decide whether to buy it.
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2. Appreciation or depreciation: if you want to buy something – such as a condominium on the beach of Hawaii – it is likely to appreciate rather than depreciate like a car, it is more cost-effective to buy it. You may only go to your Hawaiian condominium once a year, but even if you are not there, it will continue to appreciate and will not cost much (you also have the way to sell it for cash), so it is difficult to persuade yourself not to buy it.
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Having something brings a sense of satisfaction. We will be proud of what we have. But there is no need to own some things. We can rent them for our own use. In this way, we can save thousands of dollars every year and buy things that are really worth buying.