Should I buy or rent? Benefits of homeownership. Almost everybody has faced this question during his life.
The answer is not easy. Making the right real estate decision depends on a series of factors. Just to name a few, you must consider your lifestyle, your location, how long you plan to stay in the house, and the up-front and hidden costs.
Should I Buy or Rent? Benefits of Homeownership: Timing is everything
Years ago, buying a home was all American’s dream and top goal.
But, after the housing boom and bust of the late 2000s, homeownership declined in most of the U.S. biggest cities, according to Trulia. Thus, regulators intervened, and mortgage rates went down significantly.
As a result, ownership became more affordable. Indeed, in 2016, the average family could buy a home 1.5 times more expensive than the median price.
However, this trend is changing lately. Home prices are rising, and inventory is limited. According to Zillow Senior Economist Aaron Terrazas, “tomorrow’s buyers may not be so lucky,”
“Rates are showing a clear upward trend, bringing an end to an era of historically affordable mortgage payments.”
What are the benefits of homeownership?
Many people still see ownership as an important life objective. So, let’s review the advantages of being the owner of your house:
- It is a way to generate wealth through time: Millionaire DavidBach told CNBC Make It “buying a home is the escalator to wealth in America. Homeowners are worth 40 times more than renters.”
Likewise, Will Featherstone of Featherstone & Co. told Forbes:
“Each month you write a check for rent, that’s money you’ll never see again. Each month when you pay your mortgage on a home you own, you’re making an investment in something you personally own.”
- Tax benefits: you can list the mortgage interest you pay plus property taxes and mortgage insurance premiums as tax deductions.
- You control your living space: when you own your home, you’re free to modify it as you want and adapt it to your taste and living style.
As you can see, homeownership has relevant benefits. Yet, owning a house brings many costs related to repairs, fees, and projects like roof replacing.
What Are the Benefits of Renting?
Let’s check the reasons that may tilt the balance towards renting:
- Finances: Chuck Hattemer of Onerent told Forbes “If you think you’ll pay less rent while living there as compared to the down payment plus hidden costs, then it is financially advantageous to rent versus buy,”
So, you must make yourself questions such as:
How long will I live in this house?
Do I have the funds to buy that house now?
Can I cover the costs related to homeownership?
- Lifestyle: Sometimes, elements such as flexibility, career mobility, and maintenance tilt the balance towards renting. Usually, it tends to occur among millennials. In this regard, Forbes comments:
“When a new job opportunity or a new adventure … calls, they want the freedom to be able to answer and being tied to a mortgage isn’t conducive to that semi-nomadic lifestyle,”
- You don’t take care of maintenance: Many people prefer to write a monthly check in the knowledge that maintenance and repairs will be someone else’s problem.
“Buying a home is a gamble,” writes Zillow CEO Spencer Rascoff in their book, Zillow Talk: The New Rules of Real Estate. “It’s a gamble that we will want to keep living in one place”
Ready to take the gamble?
If you have assessed the benefits and downgrades of homeownership and you prefer to own your home, congratulations! Becoming a homeowner is an exciting and rewarding experience.
Did you discover that your new home requires home improvements? Call Mississippi Landsource or the experts at Doug Rushing Realty or visit us online to request an estimate.