For many people, the decision of whether to rent or buy a home is a difficult one. It is understandably one that should not be taken lightly. Renting is a great option for those who are not ready to buy a home or want flexibility.
But as you may know, there are many benefits of owning a home which makes it worth the financial investment. In this blog post, we’ll discuss some reasons why buying a home may be better than renting and help you figure out if it’s right for you!
1. Buying a home is an investment
First and foremost, you have a chance to make an investment, which will lead to a profit one day if you choose to sell. However, even if selling isn’t in the picture, you still have a chance to earn some passive income through your home if you so choose.
By using your home as an investment property, you’ll be able to use the rental income to passively fund your primary monthly mortgage payment or multiply the wealth and invest in more real estate! Having a rental property builds stability.
It’s important to note that this is not intended to be taken as any financial advice, and these investments don’t grow overnight. However, with patience, real estate investing is a sure way to build wealth over time.
2. Renting can be more expensive in the long-term
If you have monthly rent, you’re at the mercy of your landlords who can raise rent over time. This might leave you paying more, and a once economical option can become even more expensive than a mortgage payment in the long run.
And, even if you are spending the same amount of money renting and owning, which is the smarter decision in the long run? The answer is usually owning. Putting the money confidently into mortgage payments rather than monthly rent can bring you significant savings.
Although it may be the case where you spend the same amount of money owning or renting, think about where that money is going. It is a much different outcome for the money if it’s going to your landlord, rather than if your money is going into your own investment of the house.
To put this in a different way, here’s a quote from Zillow: “[I]t’s the owner being required to invest in their own home, so it’s like forced savings that benefit the owner — whereas the entire portion of a renter’s monthly payment is going to a landlord.”
3. The mortgage interest deduction saves taxpayers money each year
Yes, when you buy a home, you are incurring other expenses that you would not have to worry about if you were just renting. However, some of these expenses can be written off on your taxes each year. These tax deductions are yet another way to help you build wealth.
You can write off costs like mortgage interest accrued, property taxes, and different kinds of homeowners insurance on your taxes. This is another added value to buying a home; you are able to get money back on aspects that make potential buyers a bit weary of buying a home in the first place. These tax benefits are hard to get with rental properties!
4. It’s not as scary as you think!
One big reason why people choose to rent over buying a home is the home buying process itself. It’s daunting; there are a lot of contracts, sometimes unexpected fees, closing costs, and hours spent trying to find the perfect investment. A down payment is a huge investment!
However, if we think of a down payment going back to you, instead of to your monthly rent payments, it starts to become a little bit less daunting.
However, finding a Real Estate Agent who knows your area well, has your best interests at heart, and is knowledgeable about all of the ins and outs of the process will help alleviate some of the pressure. Check out our Free Buyer’s Guide where you can read about everything to expect during the buying process. Really – it’s not as scary as you think!
5. Homeownership provides more stability than renting because rent prices are always fluctuating
With landlords steadily increasing rent over time, you might be eventually forced to move homes and even neighborhoods if the price ceiling reaches a point you cannot afford. This is something you can avoid by buying a home and will create more stability.
If you buy your home, you’ll even be able to refinance your home to see if you qualify for a lower interest rate. There is no equivalent in the world of renting; whatever price the landlord decides, goes!
6. Owning a home means that it’s yours
When you own a home, the space is all yours! How freeing is that? With owning a house, comes all of the freedom in the world to decide what changes and renovations you’d like to make. Don’t like the hardware on the kitchen cabinets? They can go! Want to change the paint color? You’re not limited to the 5 acceptable colors or no changes at all your landlord has written in your contract.
Over time, the value of the housing market usually increases. As home values go up, you and only you will get the benefit of having such a valuable asset! Your home appreciates over time, and in a few short years, you’ll be able to cash in or build equity.
So, buy the house. Make it your own. Feel the security of owning a home, and leverage it in the future to build more wealth. When it comes to buying or renting a home, if you’re in the position to do it, buying is the way to go.
If you’d be interested in learning more about how you can go from being a renter to a buyer, you’re just one click away from a life-changing decision! Leslie Glazier Group prides itself on showing up for our clients every step of the way and beyond in their exciting journey to homeownership. We’d love to hear from you and help you do the same.