5 reasons why owning is better than renting.
There’s no question that it can feel overwhelming when you own your own home.
To some degree, renting can relieve a lot of that pressure. Someone else maintains the property and worries about its value. Costs are always predictable, and if there is a major issue like a flood, another person cleans it up. However, the benefits of owning outweigh the costs over the long term for most people.
Consider these five reasons why owning is still better than renting.
1. Financial Security
Owning a home provides a great deal of financial security and some financial options that you just don’t have when you rent. First, when you pay into a mortgage, you are paying from your own pocket. You can sell your home and get that equity as cash if you’d like to, whereas, when you pay rent, that money is gone.
You also can rent out part of your home or the whole home if you want. This passive income is highly beneficial and not something you’re allowed to do with a rental.
Further, your home is likely to increase in value over time. It’s not a guarantee, but chances are you will have earned money simply by owning your home.
2. Freedom to create the home you love
When you rent, you have very limited control over the fixtures and amenities of the property. If you want to take on changing a major part of the home, you typically need the owner’s permission.
In addition, owners frequently will not pay for improvements as that cuts into their profits. If you want a different showerhead, wall color, or kitchen backsplash, you may have to pay for it yourself. In that case, you’ll be leaving the improvement behind when you move while the owner will reap the benefits--that is if they gave you permission in the first place.
3. Monthly mortgage repayments stay the same
When you purchase your own home, your monthly mortgage won't deviate too far from your first mortgage payment, although the percentage that goes towards interest and the principal will change over time. With a fixed-rate mortgage, the interest rate is fixed from the time you sign the loan. If you opt for an adjustable rate mortgage, the interest rate may start out lower than a fixed-rate mortgage, but it will change depending on a specific index (which is determined by the lender). Other factors that may increase your monthly mortgage payment are local property taxes (which you have little control over) and home insurance premiums. However, as a homeowner, you definitely won't find yourself in the same predicament as someone whose landlord increased her rent by 400%.
4. You are building your wealth and equity
No other asset builds your wealth more consistently than real estate, and the same goes for the home you own. Real estate properties have been known to appreciate or increase in value over time.
Buying your own property and taking care of it for the long-term ensure its value will only increase over time. This is why you hear of celebrities growing their wealth even further by investing in high-value properties or other pieces of good real estate.
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