Home
Owning vs. Renting
Most everyone wants to “graduate” from renting an apartment to owning a home.
We’ve all been told that it’s better to own and there are many advantages. But owning is a big commitment and also has disadvantages. The decision to buy a home is not one to be entered into lightly.
For many, owning a home gives the feeling of having accomplished something - of having met some sort of goal in life, the goal of home ownership. This signals that your finances are in order and gives you a feeling of security that your home is your own. But, owning may not be the best choice for everyone.
Here’s some advantages and disadvantages of home ownership:
Advantages:
1. You make the rules, no landlords telling you you can’t change the paint or put an air conditioner in the window, you get better parking and can have as many pets and parties as you want.
2. It gives you a sense of security
3. Owning a home is typically a great financial investment
4. There are many tax advantages to home ownership
5. Once you get approved for a mortgage, everyone wants to lend you money so you have no problem getting credit cards and other loans (or maybe this is a disadvantage….)
6. The monthly payment is likely near the cost of renting anyway but you have the added benefit of the equity of your home.
7. You can add on to your home, put in a pool, decorate as you wish.
8. You know that once the mortgage is repaid you will have something to call your own.
Disadvantages:
1. You have full liability for accidents that happen on your property
2. You are also liable for damages to your neighbors property if it stems from your property. For example, if a tree branch breaks off of your tree and hits your neighbors house, any damage is your responsibility.
3. When things break, you have to fix them. If your water heater suddenly stops working you can’t just call the landlord and have it magically fixed, you are responsible for getting someone in to fix it and paying the bill.
4. All maintenance in and around the home is your responsibility. This includes maintaining the heating and cooling systems as well as the lawn, roof, siding etc…
5. You have a huge loan to pay back, insurance on the home and property taxes as well.
6. If you have an adjustable mortgage your payments can go up when you least need it.
7. You will need a large down payment and if you can’t come up with at least 20% you will have to pay an extra bit each month (called PMI).
Renting is a bit less of a commitment and does have advantages as well as drawbacks. Here’s some of them:
Advantages:
1. It’s easier to move out (provided you stay the term of the lease) just pick another apartment and pack your things.
2. If you can’t afford the payments anymore, simply move to a cheaper place.
3. When something breaks, just call the landlord and he takes care of everything and pays for it too.
4. Some apartments include the utilities in the rent leaving you one less bill to pay.
5. Many apartment complexes have nice amenities like a gym, pool, hot tub and laundry facilities.
Disadvantages:
1. You have no freedom to decorate the place the way you want
2. Rents can go up at the end of the lease
3. No storage space
4. No tax breaks
5. You can be evicted, even if you do nothing wrong, if the building changes hands or some other thing happens which is beyond your control.
6. Neighbors are at close quarters so you must be considerate noise wise/
7. You will be restricted as to what type of pets you can have, if any.
8. You may be restricted as to how many people can live in the apartment.
9. Your rent is not an investment - you have no equity in the apartment.
As you can see, there are advantages and disadvantages to both situations. It really depends on the individual and the way you want to live. Someone who prefers a no maintenance, no fuss way of life might love apartment living while another person who wants more freedom and likes to decorate and putter in the garden might prefer a home.
|
|
