Buying a home is a big decision. Most people rent for many years and then some rent for their entire lifetime, never realizing an ownership moment. I think most aspire to own a home they can call theirs. Rare is it that I meet someone that doesn’t want to own some sort of abode but there are those individuals that just feel they don’t need it.
In most cases, people rent because houses are just too expensive, but it all depends on the market in your area. If renting is extremely costly in your area, it might be more affordable to buy a home.
It’s a big decision, and there are lots of pros and cons to consider before you decide to buy a home. Owning a home means accounting for expenses such as closing costs, property taxes, and homeowners insurance. Even with all this, though, buying a house makes a lot of financial sense. Homeowners can deduct mortgage insurance on their taxes, and their house payments will remain the same over the years if their loan has a fixed interest rate. Better yet, home values increase over time, making it a sound investment. Gaining equity in your home can be very useful in building wealth and peace of mind with your future. Many homeowners leverage their gained equity on investments or more real estate. Then the tax credits help offset some of the cost of home ownership.
However, When you’re renting you don’t have to pay for repairs, maintenance, or other issues that come up in home ownership. To name a few:
-When you rent you might pay for renters insurance but it pales in comparison to the cost of homeowners insurance
-Property dues and fees that you might not otherwise pay when renting.
-Property taxes are also a huge piece of the mortgage payment that some really over look. Property Taxes may stay relatively flat but the appraised value of your house will very often increases… An increased valuation is great, but it increases your tax bill relatively.
There are many pros to buying. Peace and quiet, stable costs, investment opportunities are just a few more reasons to buy. Play with the rent-versus-buy calculator to consider whether your market could support buying more than renting for your primary home. Or you might choose to buy a house that’s in a different, more affordable, metro area and rent it out as an investment strategy.
When you buy a home, you’re also buying a sense of stability, both in terms of lifestyle, and emotional well being. You can establish roots in a neighborhood, and build your relationship with the community.
When you own a home, you don’t have to worry about the neighbor upstairs playing their music too loud, and somebody having a party or whatever, you just have more control of your life. You’re not worried about what somebody else is doing upstairs, downstairs or behind the wall.
You also have the ultimate flexibility with your personal living space, the costs may be completely your own, but so are the decisions. When you own your home, you also have the ability to rent it out, like and Airbnb or vacation rental if you want too. Also don’t forget that you’re paying down the mortgage loan over time and the interest that you pay on the property is tax deductible against your federal income, so not only are you paying the principal down, you’re gaining a tax benefit and you’re gaining appreciation.
Despite the added expense and extra chores associated with owning a home, many people chose ownership over renting. It provides a more permanent place to raise children and often it offers the only way to have, or create, the sort of residence people want. Ultimately, the decision to rent or to own is not just financial, it’s also emotional.