Pros and Cons of Home Ownership
Is owning a home your dream? If so, you are like many other Americans who wish to own their home as opposed to renting. On the other hand, did you know there are many people who would rather rent long-term? As you probably know, purchasing a house is one of the biggest decisions you will face in your life. Here we take a look at the pros and cons of home ownership to help you decide if owning your home is better than renting.
Pros of Home Ownership
First, we'll take a look at all the things that might attract you to the idea of home ownership. When you buy a house, it is yours. This gives you freedom in decorating, renovating, owning pets and doing all the things that you probably couldn't do in your rental unit. You have privacy in your home, and you don't have to worry about the inspections or maintenance that your landlord might currently oversee. Home ownership truly gives you a sense of comfort in knowing that you own your house.
Owning a home with mortgage payments might seem overwhelming, but you are actually gaining equity in something very valuable. Each mortgage payment puts money towards your house, while paying rent each month goes to the unit's owner. Most houses gain value over time, which means that your house will be more valuable in the future. There is also a great sense of pride in home ownership, and a great sense of community as you become part of a neighborhood.
Home ownership also entitles you to write off the amount you pay in mortgage interest and property taxes at tax time. In the future, if you sell your house, you might also be eligible for tax breaks on maintenance done to your home. In a sale where you make money, a certain portion of the gains can be exempted from taxes.
Cons of Home Ownership
Now, we'll take a look at the disadvantages that come along with owning a home. As you know, home ownership is a long-term commitment. You are responsible for monthly mortgage payments, and if you become unable to meet your financial obligations, you could face foreclosure.
For as long as you own the home, you are responsible for regular maintenance and emergencies. The burden of mowing the lawn, fixing or replacing the roof and taking care of plumbing issues falls on you. If you don't already have the tools necessary to take care of the outside and inside of your home, from a lawn mower to a vacuum cleaner, you'll have to spend money on these necessities. The bottom line is that maintaining a home costs time and money.
Financially speaking, your mortgage payment plus utilities might be more expensive than rent. Many rental units include some utilities or internet, but these amenities do not come with home ownership. Additionally, you could be subject to Homeowner's Association fees, which can add a few hundred dollars monthly to your bills.
Buying a home is stressful experience for all homeowners. There are inspections to be done and paperwork to be completed, and all of this can take a while. Plus, you will have to put forth a potentially hefty down payment. Closing costs for a house can be costly, unless you are able to negotiate that the seller pay them. Moving expenses should also be considered if you will be using a rental moving vehicle or trailer.
When considering home ownership, there are many different aspects to investigate. Financially, you must be ready to commit. You also must be able to dedicate the time needed to upkeep your home. If you are able to meet these requirements and are interested in living in a community, in a home that is truly yours, home ownership will likely be a rewarding experience for you. Home ownership provides a sense of comfort, community and several opportunities for tax breaks.
If you have decided you definitely want to explore the option of owning a home click here for your local estate agent.