The decision of whether to buy a home or rent is a serious one, and should be made after much consideration of the many financial, economical, and personal factors. Buying a home isn’t always the right thing for everyone. People find themselves at different stages of life, where permanence may have yet to be achieved, or financial stability may be a distant dream. However, when the time comes that homeownership is a legitimate option, and the decision of rent vs. buy is to be made, there are numerous advantages of buying a home that ought to be considered in making this life-shaping decision.
Whether you’re paying a mortgage or paying rent, you’re going to have a monthly bill just to live in a house. One important difference, however, is that when paying a mortgage, the money you pay each month is going toward a valuable asset that you own. In a way, you’re paying to secure something into your permanent possession, rather than paying someone else for the privilege of living in a house that they own. The money you put into your mortgage can come back to you in the form of the equity you build on your home. The longer you live in a home, the better the equity.
Another financial advantage to home ownership is the option of fixed-rate mortgages. Unlike rent, which has a tendency to increase, a fixed-rate mortgage allows homeowners to secure the interest rate for the duration of their plan, regardless of inflation or changing trends in interest rates. An October 2015 report by Trulia Inc. showed that current interest rates are some of the best since 2012, and the percentage difference of the total end cost of buying vs. renting as detailed in the report shows that even for millennials, who statistically move more often and can’t afford as large of a down payment, buying is ultimately cheaper than renting in 98 of the top 100 markets in the U.S. Another bright side of mortgages is that the interest is tax-deductible. It’s a large expense for a relatively small benefit, but if buying a home is what you’re going to do anyway, then it sure is nice to get that deduction.
When you’re the owner of the home you live in, you have the final say in what happens to that home. That carries with it the responsibility to see to all repairs and other home upkeep, but it also means that if, for example, you have a genius home improvement project that you’ve really been wanting to put in play, you can do it. There’s no one to tell you no, because you own the place. If you want to paint, you can do it. If you want to build a deck to spice up your backyard a little, go right ahead. It’s all yours.
Community and Permanence
It may be common now for people in general to move more frequently than they used to, but for those seeking the security of long-term residence, homeownership is a promising way to achieve that. Ownership encourages people to stay in one place, as the financial benefits of ownership increase with time spent in a particular place. Ownership fosters a sense of commitment to a home. Homeowners are free from the threat of being evicted because the landlord decided to sell or rent to someone else.
Along with commitment to a home, ownership lends itself to being more personally invested in the surrounding community. Many people who know they’re going to be in a place for more than a couple years will feel a desire to expand their sense of “home” by becoming acquainted with neighbors and community members, participating in community activities, and getting involved with community improvement efforts for schools and public places/services. Being a long-term established member of a community can add layers of social togetherness and enrichment that are less accessible in the transience of renting. Permanent residence has also been shown to have numerous positive psychological benefits.
This is where the emotional side of rent vs. buy comes in. Some say that the decision to buy rather than rent is an emotional one rather than a financial one. For many, that may well be true. Owning a home is part of that elusive American Dream, and while the recession of a few years ago may have made many skittish at the prospect of buying a home, there’s still something profoundly appealing about the idea of owning a home all your own. It speaks to our conception of the ideal life, and once achieved, it can be immensely rewarding. Whether your reasoning is logical or emotional, carefully consider the numerous advantages that accompany owning a home of your own.