10 reasons to Buy Vs. Renting
Home buying has earned a bad rap in recent years, but the great American dream of owning a home appears poised for a comeback. If you’re struggling with whether to buy versus rent, consider these 10 reasons to take the plunge into homeownership:
10 reasons to Buy:
1. You can ramp up energy efficiency.
Energy-efficient improvements, from adding insulation to upgrading your air conditioning unit, can reduce your monthly utility bill. While renters can make plenty of green improvements on their own, from unplugging appliances to turning off lights, homeowners can make bigger changes, such as adding solar panels or installing an energy-efficient roof.
2. You can customize your space.
Whether you need to knock down a wall to make a larger master bedroom or redo the bathroom, owning the space you live in means you have the freedom to do so, without worrying about losing your security deposit.
3. Homeowners buy less furniture.
“Often when you’re renting you need custom furniture that fits the space,” says Hodges, such as room dividers for a loft or miniature furniture to fit into a basement apartment. “When people move a lot, they can end up buying a lot of furniture,” she says. If you buy a home and settle in for the long haul, you can likely purchase a few pieces that will stick around.
4. Owning a home forces you to save.
The so-called “forced savings” argument is a widely-held one: Since homeowners have to pay their mortgage every month, they are routinely putting money away (and into their house, which they own), instead of squandering it on new shoes or fancy meals. Then, if you eventually sell your home after the mortgage is paid off, there’s a good chance that “you’ll walk away with a payoff,” even after subtracting the costs of ownership, says Hodges. (Of course, homeowners who face foreclosure or declining home values often find themselves without such equity to show for their monthly mortgage payments.)
5. Home-ownership allows you to build a second income stream.
From having an Airbnb to renting out driveway space to commuters, Hodges says homeowners are increasingly finding ways to monetize their homes. In cities with scant green space, some homeowners even rent out small patches of grass for people who want to grow vegetables.
6. No landlord can kick you out.
Renters can face an unexpected eviction notice if their landlord suddenly decides to sell the home, rent to someone else, or otherwise end the lease. That’s one reason Boston University economics professor Laurence Kotlikoff says that for older people with a fixed income in particular, he recommends home-ownership (and a paid-off mortgage). “It’s important for older people to be in a home that they own as security against a landlord,” he says.
7. In fact, you don’t have to speak to a landlord, ever again.
Landlords can take ages to fix a broken dishwasher, let the air vents fill with dust and particles, or leave pesky messages about repairs. If you’re the homeowner, then you’re in charge—which means you have to be home when the plumber calls, but the plumber reports to you. (And, of course, you also have to pay the plumber.)
8. Unlike rent, a fixed mortgage can’t go up (even if inflation does).
Fixed mortgage rates don’t go up, even if the cost of everything else does. To protect yourself, Jack Otter, author of Worth It… Not Worth It? suggests making a 20 percent down payment and taking out a 30-year fixed mortgage to lock in today’s low interest rates. “Mortgage rates haven’t been this low since GIs were heading home from France. Lock in a low monthly payment, and you’ve just taken a huge step in protecting your family against inflation,” he writes.
9. Homeowners can take tax deductions.
The chief tax benefit of home-ownership is the ability to deduct mortgage interest payments, but the perks don’t stop there. Homeowners can also deduct eligible expenses (certain energy-efficient improvements, for example) and in some cases can avoid federal taxes on earnings from the sale of a home.
10. You can take advantage of currently low interest rates and prices.
Interest rates remain at historical lows, and at the same time, home prices in many areas remain soft. Trulia points out that deals are especially appealing in suburban areas, compared with the more expensive cities. Overall, Trulia says, asking prices on homes went down 0.7 percent over the last year, while rents went up by 5 percent.
If you have any real estate questions, please give us a call. Whether buying, selling, or just curious to learn more, we are here to assist you in any way possible. We look forward to hearing from you.