Owning a home comes with more responsibility and more expense. However, there are too many advantages to owning to overlook it. Here are 12 advantages of owning a home that may convince you that renting is a thing of the past.
1. Does renting build equity?
Renting does not build equity at all, while owning a home basically gives you a bank. Although you pay interest on the mortgage that goes only to the bank, the principal that you pay is basically paying yourself and building equity that you can use however you feel down the road.
2. Do I want to customize the home?
In most cases, you cannot change a rental property at all. Owning a home means that you can create that home in your own image. These customizations can increase the value of the property, and this only adds to your equity.
3. Can I make a rental energy efficient?
If you are a green guy or girl, you might be disappointed with a rental. You will not be able to use any sort of energy efficient measures in the home. If your utility payments are not included in your rent, then you will be paying maximum prices for power when you do not have to.
4. What about furniture?
Many of the most affordable rentals come unfurnished, meaning that you have to invest in furniture. When you get ready to move out of that space, you have the expense of holding the furniture. If you are moving out of town, you have quite a problem on your hands: Movers are unreliable, and storage businesses will continually raise the price on you month after month.
5. Will I save money if I rent?
You may think that the lower cost of renting will help you to save. This is actually less effective than trying to keep up with the many different payments that you are responsible for. Because you will need to organize your finances in order to keep up, you will end up saving more.
6. Is my house now a second income stream?
There is no way to build a rental up into a second income stream. However, a home that you buy can be monetized in many ways. You can rent it out, rent garages as storage spaces, grow vegetables to sell at a local farmer’s market, or have certain kinds of home businesses that are not allowed in a rental space.
7. Can a landlord kick me out?
When you take on a rental, your landlord has the final word on whether you can stay or not. If the landlord decides to sell the house, you could be out on the street. If you are an older person, it is especially important not to be at the mercy of a landlord, and you will not be if you are an owner instead of a renter.
8. Do I have to wait on repairs?
A landlord does not have the onus to fix the repairs in the apartment that you rent, especially if it does not profit him to do so. Your air vents can become clogged with no restitution, and there is very little that you can do about it other than leave an angry message. If you own the home, then you can have a broken appliance fixed on your time and on your terms.
9. Am I getting charged more with inflation?
Even though rent is possibly cheaper than a mortgage month to month, aside from the loss of equity, a landlord can pass along his inflation and cost of living expenses to you in the form of a rise in rent at the end of every contract. A fixed interest rate and the total monthly cash outlay on a mortgage does not go up, and if you lock in very low interest rates, then you actually make money whenever inflation hits.
10. Do I get to take any tax deductions?
Renters pay for inflation and cost of living of landlords; however, the renter does not get to take any tax deductions from this payment. In large metropolitan areas, loss of the tax benefit actually brings the monthly expense of renting and a mortgage to parity. If you own a home, you also get to deduct many of the improvements that you put in the house that end up saving you money such as energy efficient heating or solar panels.
11. Can I take advantage of market rates as a renter?
As a renter, you cannot take advantage of any low interest rates. You pay what you pay, and there is really nothing that you say about it. Your payment is affected by location, legacy, amenities, and many other factors that have nothing to do with you. As a homeowner, you get to take advantage of all of the market leverage that you can find.
12. Do I have layers of protection?
As a renter, if you lose your job and do not pay your rent that month, your landlord can take immediate action against you. As a homeowner, you have options for negotiation. You can use the equity that you have in your home, and banks are generally more lenient with people as long as they are upfront about the changes in the income stream. In short, a bank will not kick you out as quickly as a landlord.
2 Point Highlight
In large metropolitan areas, loss of the tax benefit actually brings the monthly expense of renting and a mortgage to parity.
A landlord does not have the onus to fix the repairs in the apartment that you rent, especially if it does not profit him to do so.
