Monday, 9 October 2023
by Rose White
Buying a home comes with a lot of upfront and ongoing costs. It also comes with a lot of responsibilities. Not only will you have to commit to paying a mortgage loan, property taxes, and insurance, but you’ll also need to take on the cost and responsibilities associated with maintenance and upkeep. If something goes wrong, you can’t just call a landlord — you have to handle the issues on your own.
Despite these hassles, I have owned my own home for well over a decade and I find being a homeowner to be well worth the downsides. There are a few key reasons why that’s the case.
The single biggest reason I believe homeownership is worth the hassle is because owning a house can help you build wealth.
When you make monthly mortgage payments, a portion of that goes toward principal and helps you build home equity. You eventually own your house and have an asset that’s worth hundreds of thousands of dollars. This isn’t the case if you rent. Your monthly mortgage payment is essentially a type of forced savings, while your rent just buys you a place to live.
As you live in your house, it typically goes up in value each year. This property appreciation also helps you build wealth since you’ll end up owning a more valuable asset over time. These big financial benefits help explain why homeowner wealth is 40 times higher than that of renters.
Now, this doesn’t mean you can’t get rich by renting. It’s definitely possible to do so. But you’ll need to be a lot more diligent in how much you invest since you won’t be acquiring an asset automatically via monthly housing payments.
In many cases, you will have a wider selection of homes to buy than homes to rent. At least where I live, rental properties tend to be mostly apartments or condos rather than single-family homes, and they tend to be more concentrated in urban areas. I wanted a house on acreage in the country, and you can’t easily get that in a rental property.
Finally, the last big benefit of homeownership is the ability to customize the property. You can invest in making the space your own in a way that you would not want to do if your money was improving the landlord’s property instead of your own. You also don’t need to get permission to paint or change the kitchen cabinets or do anything else you’d like.
In my opinion, these three big benefits of homeownership make it well worth the hassle associated with owning your own place. But before you buy a home, you need to consider the pros and cons. If you don’t want to commit to staying in one place for a while to build equity, or if you don’t want to take on the responsibility of maintaining a home, renting may be a better bet for you — at least for a while.
Always weigh the pros and cons of being an owner carefully before you decide whether to move forward with buying a property of your own. It’s a big decision that can affect you for years.
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