Why Buying Over Renting is Often the Better Option In the Long Run

Buying a home is a big decision, possibly one of the biggest decisions in your life. When most people get out of school and start working at their first job, they choose to rent an apartment over purchasing a home. And in multiple cases, that can be the best option for that individual. On the other hand, many people don’t buy homes right away for their fear of locking in a 30 year commitment or because they believe the cost of owning a home is too expensive for them. In many cases, that is not necessarily true. While there are a handful of benefits people should rent instead of buying, I will be discussing why buying is the better option over renting when the time is right for you.

Building Equity

While renting, a person pays a set amount of money that goes to the landlord or company every month so he or she can continue living there. While it is convenient that rent includes any maintenance problems and upkeeps, that person never sees that rent money again. When you buy a home and start paying principal towards your mortgage, you start building equity in the house that ultimately becomes yours. Let’s say that your house is valued at $150,000 and after five years, you have paid $10,000 in principal, and you decide you want to sell your home. You sell your home for $150,000. $140,000 would go to pay off the remainder of your mortgage and the $10,000 in equity becomes yours. With renting, it doesn’t matter how long you have been at an apartment or how much rent you have given the landlord over the time spent there. Once you pay your current month’s rent, that money is gone forever. Of course, buying a home with a 30 year mortgage is a big and scary commitment. But luckily, you always have the option to sell that house for whatever the reason may be before your mortgage ends.

Learn to Save

Money management can be one of the most important and necessary skills a person can have in the world we live in. In most cases, without money, a person can barely live. Let’s face it, renting is easy and most college students can figure out how to get an apartment without too much help from their guardians. It is also nice that it is only a one year commitment. On the other hand, buying a home is a big responsibility that one shouldn’t take lightly. Once students finish school and start their jobs in the workforce, buying a home rather than living with their parents would be ideal. In order for them to make that happen, they must start putting money aside so that they can afford the down payment on the house. Once they can afford the all the closing costs to get approved for a mortgage, they now have to pay a monthly mortgage payment. In many cases and depending on the cost of the house, their monthly mortgage payment will be about the same amount of money or sometimes even less than it would be if they were renting an apartment. As a homeowner, you no longer have the privilege of calling your landlord every time something stops working. Now, it is your responsibility to fix things on your own. But again, this will teach you the mentality to set money aside for when you do have maintenance problems, which will help you grow as an individual and become more responsible.

Have the Freedom

As a homeowner, you don’t have to answer to or explain anything to your landlord because you own the property. You have the freedom to paint your walls, put in or remove carpet, have pets, or rearrange the furniture. Your living quarters should be customized to fit your needs, not your landlords, and owning your home gives you that opportunity. In addition, you can improve parts of your home such as remodeling your bathroom or other places, which is ultimately going to give your home more value in many cases. By increasing the value of your home, that will mean more equity in the house for you.

Consistent Monthly Payment for Life of Loan

Every year after your lease comes to an end, you have the option to renew your lease and get into a new contract when renting. In many cases, a new contract will mean paying more per month for rent for one reason or another. However, when you buy a home and receive a fixed mortgage, your monthly mortgage payment will be the same for the entire length of the mortgage, whether that be 15 years, 30 years, or something different. Thanks to fixed mortgage options, when you buy a house you no longer have to worry about negotiating with your landlord every year for your new rent amount, which is often time higher every year.

Pride of Owning Your Own Home

When you rent an apartment, most people will say, it is “my apartment.” But if you think about it, it’s not your apartment at all. You pay rent and in exchange, you get to live there for a period of time. But if you break any rules, don’t pay rent, or treat the apartment poorly, the landlord has the option to kick you out. When asking the tenant why he treated his apartment poorly, a common answer could be, “it’s not mine” or “I don’t own it.” But when you buy a house or anything for that matter with your own money, there becomes a sense of pride of ownership. Most people want to keep their home in the best possible condition because a person’s home and the condition it is in can often be a reflection of the person’s personality or lifestyle. After all, most people in the US dream of one day getting married and starting a family. And it is much harder or inconvenient to live that dream without having the pride of owning a home to provide for your family.