Owning a house is very different from renting. Understanding some of the key benefits and drawbacks of buying a house can help you decide if this is the right approach for your family. From the amount of money needed upfront to annual tax savings and even maintenance costs, here are some of the home ownership advantages and disadvantages.
Home Ownership Advantages
Build Wealth: For most of us, our home is our largest investment and one that increases in value over time. When you purchase a home, you naturally build equity as you make improvements and pay off your mortgage.
Tax Savings: The property tax and interest you pay on a home you own is tax deductible. This can add up to significant savings for you each year at tax time. If you make green improvements to a home you own, you’ll not only reduce your carbon footprint, you’ll get additional deductions as well.
More Control: From the ability to paint your rooms whatever colors you like, have as many pets as you want and even decide if you want to upgrade your exterior, when you own the home, you have creative control. You also don’t have to worry about a landlord selling your home before you are ready to move.
Privacy: Perhaps you don’t like the idea of a nosy landlord. You may simply want your own space that you don’t have to answer to anyone else about (except the bank). Either way, owning a home is the right way to go.
Advantages of Renting
No Maintenance Costs: If the air conditioning breaks, the fridge stops working or there is a plumbing fail, you’re not responsible for the repair work.
Lower Upfront Cost: Depending on the mortgage product you are interested in, renting can be less expensive up front than buying. Some loans, including VA loans are equal or even less than the cost of renting.
Flexibility: That downtown location may have seemed like a great idea when you rented the house. But now, a year later, you’re ready to move on. As a renter, once your lease ends, you’re free to move. A house will have to be sold or rented out before you can move on.
Affordability: In some markets, you can get more house or space for your money when renting. Buying could result in a higher monthly payment.
Bundled Services: Some rental locations provide utilities and other services, from trash pick up to lawn care. These additional services can save you time and money.
Home ownership advantages at the right time will ensure that you can build wealth and thrive in a home you own. For some people, renting may be the best option for now. It’s a good idea to regularly review your personal needs and goals. This process can help you decide which model is best for you and help you make the best possible decision for yourself and your family.