Owning Versus Renting: Which is Better and Why?
When it comes to choosing where we live, there are a number of options. You can opt for the city, go out in the country, or choose somewhere in between. However, one of the biggest decisions you’ll have to make is whether to buy or rent. While renting has some benefits in terms of ease and access, there is a reason why homeownership is a big part of the American dream. Here are a few reasons why owning your home is better than renting it.
Owning a Home Costs Less than Renting Over Time
When you factor in the steady monthly note of your mortgage, the different tax advantages available to homeowners, and the consistent increase in the cost of rent; owning a home actually costs you less in the long run.
You Can Make Your Space Your Own
Owning your home gives you the opportunity to make any changes and renovations that you can imagine. Need extra space? Add on to your home. Need a more open floor plan? Take out that wall. Paint any color you’d like. Renting comes with very strict, if any, options for changing what currently exists. Even if you can make updates, you’ll be spending your money to improve someone else’s property.
Budgeting is Easier with a Fixed Rate Mortgage
When you rent you can be almost certain that each new lease will come with an increase in rent. However, when you buy your home with a fixed-rate mortgage your payment will remain the same for the life of the loan. Of course you can always pay more on a monthly basis further reducing the overall cost of home ownership.
Home Ownership Provides a Built-in Savings Account
Every month you pay your mortgage you are actually putting money into savings as an investment. As the balance of your mortgage decreases, the equity in your home increases with every payment. So while there may be no balance sheet, you are actually keeping more money for the future each month.
Owning a Home has Tax Advantages
When April rolls around and you’re doing your taxes, owning a home can make a big impact. The interest on your mortgage is tax deductible. For new homeowners this can be especially beneficial as a large part of each mortgage payment is the interest in the early years. Also, if you make energy-efficient improvements or other eligible upgrades, you can deduct them as well.
These are only a few of the things to keep in mind when you are deciding to purchase a home. The first decision you need to make is to entrust a REALTOR® to help you find your home.
