If you are thinking about making the leap from renting to buying your first home, make sure you know the advantages of both.
An incredibly common question that I come across is, “Is it better to own a home or rent?” There are advantages to both options, but I think overall, one is a clear winner.
Let’s start with the advantages to renting.
Unlike owning a home, when you rent, you have no long-term commitment. You also don’t have any property maintenance expenses. Most importantly, you don’t have the responsibilities of homeownership, which can be quite daunting for some folks.
Now let’s talk about the advantages of owning a home.
When you purchase a property, you can lock in a great interest rate and therefore a great mortgage payment. Unlike with renting, where your rent could go up at any time by any amount, owning a home means you will know exactly how much your mortgage payment will be no matter how much time passes.
Owning a home means always knowing what your monthly payment will be.
Additionally, if you own a home, no one is going to kick you out. Landlords can serve notice if they decide to sell the property or even move back in. This leaves you vying for a place to live usually armed with only a 30-day time frame. Talk about stressful.
One of the most fun advantages of ownership is that you can decorate and customize a home to your style. Most renters don’t want to invest in a home they don’t own, and even if they wanted to, they have to go to the landlord and get permission for every single thing they do. It can be a huge hassle, which is why most renters don’t even bother really making a space their own.
Finally, there are fantastic tax write-offs when you own as opposed to renting, as well as the ability to build equity and grow your net worth. Your home’s worth will increase over the years, and during that time, you will pay down the mortgage. When you go to sell, you will pull equity out as far as gains and what you have already paid on the mortgage. Or, perhaps you get the entire mortgage paid off, which would then net you 100% of the selling price.
When you own a home you build your net worth, but when you rent you build your landlord’s net worth.
Overall, owning is much better than renting unless you plan on being somewhere for a short period of time.
If you have any other questions, feel free to give me a call or shoot me an email. I look forward to hearing from you!
