Rent or Buy?
Buying and renting both have their ups and down, but one is proven to make your money go further. Buying a home is almost always the better choice, if you’re ready to take on a mortgage and all of the other costs that come with home ownership, that is. But, before you shy away and sign that 12-month lease, consider what you could be getting and saving by buying a home instead. Here are 10 advantages of buying a home versus renting:
Build Equity: A major advantage to buying a home over renting is the ability to build equity over years of ownership. You build equity as your home value increases and you can leverage this value to take out lines of credit. Tenants don’t receive equity when renting because they don’t own their house.
Ownership: One of the biggest advantages of buying a home versus renting is the ability to own. Ownership gives you the right to upgrade your home, rent it out to tenants, sell it and do as you please. Buying a home is one of the most important and valuable investments a person can make.
Make Upgrades: A major advantage of buying a home is having the ability to make upgrades and improvements that will increase its value and give it more curb appeal. Owning a home gives you the right to decorate, renovate and remodel as you please to make your home look just how you want it. Renting limits your ability to personalize your home because most landlords won’t allow their tenants to paint the walls, replace fixtures and appliances or make
any major changes.
Lock In Payments: When you buy a home, you secure a monthly payment that you will pay for the rest of the time you own the home. If your finances suddenly change and you need to scale back on your monthly expenses, you have the option of refinancing your mortgage to reduce your monthly payment. This does come with some risks and you may have to face higher interest payments, but it’s a nice option to have when money’s tight. Tenants have less control of their payments because rent can increase from lease to lease.
Increase Line of Credit: Buying a home increases your line of credit and can improve your score in more ways than renting. Homeowners with an increased line of credit will have a higher credit limit and get low interest rates on credit cards and loans. Renting limits your credit-building opportunities and doesn’t make quite as big of a splash as having a mortgage in your name.
Make a Profit: Whether you’re a business-savvy homeowner who’s looking to make a quick profit from flipping a house, or a homeowner who’s wanting to sell their house after it increased in value, you have the ability to make a profit when you own a home. When renting, you never make a profit because you don’t own the property.
Payments Eventually End: A major advantage of buying a home versus renting is the simple fact that mortgage payments will eventually end one day. It usually takes about 15 to 30 years to completely pay off your house and own it for good. When renting, the payments just keep coming and they don’t end like a mortgage.
Home Value Increases: After years of owning a home, its value increases. Depending on the neighborhood, schools and other property values, purchased homes generally appreciate in value throughout the years, making them more and more profitable. For many homeowners, their home is worth much more than what they bought it for. Renting doesn’t allow you to make a profit because you don’t own your home.
No Landlords: When you buy a home, you no longer have to deal with pesky landlords. Having the freedom to run your house the way you want it and taking all tasks into your own hands is actually a rewarding responsibility.
Emotional Satisfaction: Homeowners feel greater emotional satisfaction from having a piece of property in their name and investing their time and money toward something as important as a house. This is especially true for first time homebuyers. Renters may experience some emotional satisfaction and pride in renting, but not nearly as much as homeowners.
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