May 19, 2023
10 Reasons to Buy Instead of Rent
If owning your own home is high on your list of goals, now might be the right time to take the plunge. After all, every rent payment represents hundreds or thousands of dollars that could be dedicated to buying your little piece of paradise. Here are ten benefits of buying vs. renting.
1. Pay your mortgage instead of your landlord’s
One of the most compelling reasons to buy a house rather than rent relates to your monthly payment. When you rent, you are essentially making a mortgage payment already – but for the property owner rather than yourself. Additionally, you generally pay a premium for renting to cover the costs of insurance, property taxes, property management, and other services. Instead, by choosing to own your home you can put that cash toward building equity month after month.
2. Control your own space
Next on the list of benefits of owning vs. renting relates to style. Hate that paint color? Change it. Ugly backyard? Plant a garden. When you’re a homeowner, you call the shots on the look and feel of your home. When you’re a renter, even the smallest nail holes may result in a damage report when you move out. And then a portion of your deposit is held back by the landlord.
3. Build personal and generational wealth
For many people, a home is the largest purchase they’ll make in their lifetime. That means you have access to the value of your home – a value that can increase over time with proper upkeep and standard market appreciation. Additionally, the tax advantages of homeownership can accrue to your heirs who can inherit your home at its higher value, then choose to live there, sell it, or hold it as an investment property of their own.
4. Enjoy more property options
Another owning vs. renting advantage: When you’re looking for a rental, you may be limited in the types of property you can find and qualify for in your local market. By contrast, your home purchase may offer you far more flexibility, including a variety of architectural styles, home sizes, and features..
5. Put down roots for yourself and your family
For various reasons, you may be far more likely to move more frequently as a renter. This can be due to several factors, including poor property management, rent hikes, or a property owner’s decision to sell the home you’re renting. By contrast, there’s more incentive to stay put and put down roots in your community as a buyer.
6. Enjoy emotional benefits
Many studies link homeownership with greater satisfaction and happiness, and it’s easy to see why. The ability to control your environment and the pride that comes with tending to your little piece of earth can profoundly affect your well-being. In addition, there’s a sense of accomplishment that comes with homeownership since many people view it as a lifetime goal.
7. Experience greater financial stability
When you’re renting, every lease renewal may bring with it a higher rent amount for the following year. Switching from one rental to another may involve thousands of dollars in deposits, limiting your options even further. By contrast, a fixed-rate mortgage provides a consistent payment schedule that lasts throughout the life of your loan.
8. Experience greater housing security
If you’ve ever had a landlord notify you that your lease won’t be renewed, or that they’ve decided to sell the property to a new owner, you know how scary it can be. When you own;however, you make the decisions about where you’ll live and for how long, including whether or not it’s time to upgrade to a larger space or relocate to a new area.
9. Be part of the community
As a homeowner, you have a financial investment in your community, with more of a say in what happens there. You may be a member of the homeowner or condo association or the co-op board. As a property taxpayer, you have a voice at the city council or county commission. In addition, you’re perceived as a permanent resident by your neighbors rather than a temporary guest of your landlord.
If you’d like to create additional streams of income or get a little help paying the mortgage each month, you’ll be able to add investment potential to your home at will. Convert an unused basement or garage apartment into a rental property, add a tiny home or take in a renter to fill that spare room. Relocating for work? Hold onto your home and rent it out to offset your expenses.
So: Should I rent or buy a house?
While owning your own home has endless potential, it’s not for everyone at every stage of life. Take time to decide if you should buy or wait, and remember the many benefits of owning a home will be available when the time is right for you.
First-time homebuyer? Explore the four stages of buying your first home.