Homeownership is Making a Comeback With Rents Going Up. Low Interest Rates Makes Buying More Affordable Than Renting.
If you are struggling with the question to buy or rent, consider these 8 reasons to make the investment in homeownership.
- You Can Increase Energy Efficiency. Energy-efficient improvements such as upgrading air conditioning, adding insulation, or installing solar panels can reduce your monthly utility bills. While renters can make a few green improvements on their own, from unplugging appliances to turning off lights, homeowners can make more cost saving changes. A new energy-efficient roof or insulating window coverings adds up in yearly utility bill savings. Certainly, a renter living in a one bedroom apartment will use far less energy than a homeowner in a three bedroom house so square footage can influence energy improvements.
- You Can Remodel and Personalize Your Space. Updating bathrooms, kitchens and appliances to reflect your taste is an advantage to home ownership. Renters do not have that freedom and security deposits are always in jeopardy.
- Owning a Home Forces You to Save. Since homeowners have to pay their mortgage every month, they are typically putting money away and into the home they own, instead of splurging on the latest gadgets or binging on expensive meals. The reward for prudence is when you sell your home, there is a good chance that you will walk away with a financial gain even after paying selling fees.
- The Landlord Can’t Kick You Out. Landlords have various ways to end a lease and force you to move. The owner of the rental could decide to sell the property, or he could be behind in his mortgage payments leading to a possible foreclosure situation. Home ownership is recommended for older people, especially those on a fixed income to be in a home they own as security against a landlord.
- In Reality, You Don’t Ever Have to Speak to a Landlord Again! Landlords can take their time making non-life threatening repairs and refusing to repair items. Often equipment and appliances are replaced with cheaper units. When you are the homeowner, then you are in charge, which means you have to be home when the plumber calls, but the plumber reports to you. Of course, you now pay the plumber instead of the landlord.
- Homeownership Means Tax Deductions. The main benefit of homeownership is the ability to deduct mortgage interest payments. But that is not all, homeowners can deduct eligible expenses such as energy-efficient tax credits and in most cases avoid taxes on the gain when you sell your home.
- A Fixed Rate Mortgage Can’t go up, But Rent Can. Many cities across the U.S. are experiencing escalating rents and forcing tenants to move. The inconvenience could cause you to be further from work, change schools for your children or a new rental that is inferior to what you had. Fixed rate mortgages can’t go up, even if the cost of everything else does. The best advice is to make a 20 percent down payment and taking out a 30 year fixed rate mortgage to lock in today’s low interest rates. If you get a raise at work or bonuses, you can always make direct payments to the loan principal amount without a penalty. Making additional principal payments has huge interest savings over the long-term.
- You Can Take Advantage of Currently Low Interest Rates and Prices. Home prices in most cities have increased moderately the past few years, but the interest rates are still extremely low making homes affordable. Of course, buying is not for everyone. If you live in a city like Denver with runaway home prices, homeownership may be out of the question. Perhaps you might move soon, your current employment is uncertain or you want the flexibility to find another rental with just a month’s notice, then renting can be ideal.
During the housing bubble, people were looking at homes as a means to make money, today, they see it as a place to live.