The Benefits of Buying a Home vs Renting
In a seller’s market, it can be difficult to see all the benefits of buying a home. You may be turned off by the down payment, the commitment, or if you’re not sure about lengthening your commute to work. While these are all understandable questions, take a look at some of the benefits of buying a home vs. renting.
3 Benefits of Buying a Home Instead of Renting
Return on Investment (ROI)
One of the big benefits of buying a home vs. renting is that when you rent a home, you are paying a monthly amount to your landlord, but you won’t see that money again. When buying a home, you are paying a monthly mortgage, but you’re investing it into the home so when you’re ready to sell, you have likely gained equity (especially in a seller’s market).
When you buy a home, it belongs to you and is considered one of your assets. Over time, home ownership can help you build wealth, almost like a built-in savings account. No matter how tight your budget may be, you are forced to make your monthly mortgage payment.
Buying a home also offers tax benefits. Most home owners can deduct mortgage insurance on their federal income taxes. This can be a large deduction since mortgage insurance payments are often the largest portion of mortgage payments in the early stages on a loan.
Finally, buying a home often costs less than renting over time. Due to inflation, monthly rent will often rise year to year. When you sign a fixed-rate mortgage loan, you’ve capped the list-price of your home. The cherry on top is when your home is all paid for, you can stop making payments and still keep your home. No matter how long you rent, an apartment or home will never be yours!
Roots in the Community
On average, home owners live in a community 4x longer than renters. Living in a community comes with its own advantages. When you build relationships with your neighbors they are likely to watch over your home if you’re gone, or communicate when a potential threat has entered the neighborhood.
Staying in a neighborhood can also benefit your family. With other families around, your kids have close friends, and they can also study together for school. Home owners are 16 percent more likely to belong to parent teacher organizations (PTOs). Given the importance of education, when you’re a part of a PTO, your voice can be heard and help shift the way the school runs. This also allows you to meet other PTO members who share your same opinions. Finally, homeowners are 28 percent more likely to vote than renters.
Control Over Your Home and Yard
One of the most downplayed advantages of buying a home vs. renting is that you’re able to paint, garden, remodel and update your home without permission. Even HOA rules are more lenient than in a rental space since you own the home.
When renting a home, you usually have to ask your landlord to approve changes, and even if they agree, you will likely have to change it back by the end of your lease. Additionally, landlords charge renters a security deposit and expect that paint chips, dents, and holes in the wall are fixed by the end of the lease.
If your dream has always been to plant a garden and decorate your home with your own style, then owning a home allows you to freely do that. The pride in owning a home is enough for some people to face a longer commute, or other life changes that need to be adjusted after buying a home.
You might also like: Top 6 Reasons Buyers Bought a Home vs. Rented in 2017