6 reasons to buy a house instead of renting
For many people, owning a home is the fulfillment of a childhood dream.
While for others, it’s their worst nightmare.
Buying a home is one of the biggest financial decisions you’ll make in your life.
And when you think about buying a home, many questions will come to mind.
Do you need to buy a home?
Is your income going to grow?
Are you responsible enough?
Buying your own home is a major financial move, so it’s wise to look at both the positive and negative aspects.
Since the beginning of the year, home prices and mortgage rates have been in the news several times. Because of this many homeowner hopefuls might think they’ve missed the boat on buying a home they can afford. But it’s not true. There are many reasons buying a home makes sense and also why buying instead of renting in 2017 might be the best option for you.
You can ramp up energy efficiency
Energy-efficient improvements around the home can reduce your monthly utility bill. From adding insulation to upgrading your air conditioning unit, there are endless options. As a renter you can make many green improvements to your home, from unplugging appliances to turning off lights but you can’t make major permanent changes to the property. But homeowners, on the other hand, can make bigger, permanent changes such as adding solar panels or installing an energy-efficient roof.
Customise your own space
Whether you need to knock down a wall to make space for your new bedroom furniture or redo the bathroom to reflect your personality as a homeowner, you can do it all. You’ll have the freedom to do whatever you want to with your space. And you won’t have to worry about losing your security deposit. You can change anything you want whenever you like. If you want to repaint the dining room in bright yellow, so be it. If you feel like redoing the landscaping, go for it.
You’re forced to save
Since homeowners have to pay their mortgage on a monthly basis, they’re routinely putting money away. And they put it into their house which they own, instead of squandering it on unnecessary things. If you sell your home after the mortgage is paid off, there’s a good chance you’ll walk away with more than enough money to purchase something bigger, better or which is more of an investment. So when buying your own home, you’ll be forced to save, which is a great thing. And of course, homeowners who face foreclosure or declining home values often find themselves without such equity to show for their monthly mortgage payments.
No landlord can kick you out
As a renter, you can face an unexpected notice if your landlord sells their home, rent to someone else or otherwise end the lease. That’s why it’s recommended for someone with a fixed income to invest in a property and a paid-off mortgage. And if you’re an older person, it’s important for you to own your home as security for your future and so you may always have a roof over your head. When renting, you might wait long for a broken dishwasher to get fixed, as an example. As a homeowner, you’ll be in charge and won’t have to worry about things like this.
You can build a second income stream
From taking in a renter in a spare bedroom to renting out driveway space to commuters, homeowners are finding ways to monetise their homes. In some towns with scant green space, some homeowners even rent out small patches of grass for people who want to grow vegetables.
Investment
If you compare the cost of paying rent every month to the cost of paying a mortgage, take a look at the end result. A mortgage may prove to be a better investment of your money. It’s especially true if you opt for a fixed-rate mortgage. Over time, your rent is likely to go up with the cost of living. But if you lock in a mortgage at a low-interest rate, often the payments are lower than renting. Even taking into account the costs of getting a loan, insurance and maintenance, you may find you’re better off with a mortgage. So buying your home instead of renting is a good investment to make.
Buying a home isn’t for everyone. If you might move soon, your career is unstable or you want the flexibility to upgrade your digs with just a month’s notice, then renting can be ideal. Prospective buyers should first consider the transaction costs of homeownership, which can add up, especially if a buyer doesn’t plan to stay put for very long.