7 Reasons Buying Beats Renting
Ahh, the age-old dilemma – should I continue to rent or take the plunge and buy a home? We get it - it’s a tough one, particularly after a tumultuous time during the pandemic. It was a whirlwind 2021 for the housing market, but it set the stage for a home-buying frenzy as the shortfall in supply met record-low mortgage rates, remote work trends, and new opportunities for first-time home buyers. But there’s more to the story of what got so many people to pursue their first homes. The conventional wisdom always tilts toward buying. Owning a home has always been considered a major piece of the American Dream. There’s just something special about the idea of a place of one’s own that inspires people to trade in a lease for a deed. So, if you’re on the fence, we’ve rounded up some top reasons why buying beats renting every time.
The benefits of owning your own home by far outweigh the pros of tenting.
1. You will be paying off a property you own
The prices have been surging in both cases, which made the math increasingly complicated. So, why not drop the math for a second and try to think about it this way: one way or another, you will spend your money on housing. The only difference is whether you are spending it on your landlord’s property or your own.
When you rent, 100% of your monthly payment goes into your landlord’s pocket and a property you don’t own. And, aside from the security deposit at the end of your lease, you won’t see any of that money again. In other words, you’re “paying into nothing”. Every time you make your monthly mortgage payment, on the other hand, you are building equity. That means you’re moving one step closer to becoming a full owner of your home—something a rent check cannot do. Once your mortgage term comes to a close, you will end up with a valuable asset you can truly call your own. Furthermore, there’s potential for capital gains if you decide to sell your home. In other words, if your home increases in value by the time that you choose to sell it, you get to pocket the equity on top of the money you’ve already paid off.
Every time you make a mortgage payment, you are building your equity.
2. Your mortgage payment is consistent
Home prices may have soared, but rental prices have been shooting up as well. Landlords are taking advantage of the housing market while it’s hot, especially after the state’s eviction moratoriums left many non-corporate, “mom and pop” landlord households feeling the pinch. All this leaves the American Dream of owning a home on the backburner and sets merely keeping a sturdy roof over one’s head at the top of the priority list. With rising rent prices and no eviction moratorium, many renters are left vulnerable to eviction yet again. In essence, if you hit financially tough times and cannot afford your monthly rent check – out you go.
So, another reason why renting is better than buying is that your mortgage payment doesn’t depend on how prices are moving in other industries. You’ll be paying a certain sum on your monthly mortgage payment until your mortgage term ends, which can help you to predict expenses in the long run.
3. You will get a boost in your credit score
Indeed, most debts are wealth killers. But not all debt is the same. In fact, mortgages are often referred to as “good debt” by creditors. Did you know that, if you make reliable payments and whittle down the balance, taking out a mortgage can eventually improve your credit score? Paying the same amount in rent, on the other hand, cannot do that for your credit score.
Know that when you first open a mortgage account, your credit score will take a slight ding. But that’s only temporary. After several months of regular, timely payments, you’ll notice your credit score begin to trend upwards. It’s all about how well you manage this debt.
4. Homeowners enjoy big tax benefits
If you rented in the past, then all of your hard-earned cash went straight into your landlord’s pocket, and not a single penny came back to yours. All that changes if you are a homeowner.
As a homeowner, you can save a significant sum of money at tax time by itemizing deductions, such as mortgage interest expenses, property taxes, and more, on your tax returns. Renting your home, on the other hand, doesn’t entitle you to any tax benefits. Besides, another type of loan helps you diversify your credit portfolio. So, if you’re on the fence, these reasons why buying beats renting may help tip the scales in favor of buying.
5. Buying beats renting because you can make your home truly yours
Home upgrades are a one-time expense that can boost your curb appeal and bump the value of your property. And, with no landlord looking over your shoulder, you have all the flexibility you could want in terms of remodeling your home (as long as it abides by local building codes, of course).
But it’s not all about the curb appeal. Since tenants don’t hold the same flexibility as homeowners, it can be difficult for them to make their home feel, well, more like home – at least not without the fear of a forfeited deposit. And it is important for a person to feel at home, especially if they’re about to hire movers and transfer from other parts of the state. When you move long-distance, everything feels novel and strange. And those cookie-cutter walls, generic décor, and generally that lack of the warm, lived-in vibe in your own home hardly help the case. Whereas as a homeowner, you are free to tackle any project you want – even if that means completely gutting an entire room and starting from scratch. Your home is your own.
6. You gain a sense of stability and security
And then come the invaluable intangibles of owning your own home. There’s a sense of permanence, the ability to freely set down your roots without having to worry about rising rents, nosy or dictatorial landlords, or one of their cousins wanting to move in as your lease expires.
Any of these scenarios would place renters in a pretty tough position of struggling to raise more money for rent or scrambling to secure new housing on short notice. And, moving on short notice is no funny business. Relocations usually require that you find professional assistance that can get the job done quickly and effectively and that you book their services well in advance. And as the guys at royalmovingco.com tell us, finding proper movers can be extremely difficult, especially if it’s peak season.
Once you buy your own home, you are there to stay.
So, property ownership offers not only priceless freedom from rental rules and landlord laws but also the emotional security of owning your own home.
7. You will experience a sense of belonging and community
Among the reasons buying beats renting that have earned a place on our list is that buying helps you find and put down roots in a community. We all want to belong somewhere, and, as a homeowner, you are more likely to get to know, connect, and form a long-lasting friendship with your neighbors. This is because you are more likely to stay in your home for a considerable amount of time, whereas renters tend to be more transient. And with all this come the greater voice and more influence in community affairs, such as development proposals, school issues, and any other concerns the community may have in their neighborhood.
Attracting the Millennial Home Buyer
Millennials, people born during the last two decades of the 20th century, are the largest generation to come along since the Baby Boomer generation. They make up 36% of all homebuyers and search for a new home approximately every two years, about three times more often than the Baby Boomers. Also known as Echo Boomers, millennials are trendy, tech-savvy individuals who have turned today’s shopping world upside down. No longer do they “visit” stores and malls, they do the majority of their shopping online. So if you want to attract these homebuyers, you need to step into their shoes and do what it takes to connect with them, grab their attention, and make your home into something that appeals to them.
Marketing Style Matters
These homebuyers aren’t going to search through the real estate section of the local newspaper, jump into their car, and then drive out to your home to see if they are really interested in buying it. They shop for everything online first. You need excellent photos (or even better, a sensational walk-through video), the home must be move-in ready with no updates or repairs needed, and it should be properly staged.
Smart Home Technology Is a MUST
Smart home technology is no longer science fiction. Connected homes, along with smart gadgets and appliances, are becoming today’s new normal in home design. There are several affordable options that you can add to your home to attract millennial buyers. Add voice assistants like Amazon’s Alexa, Google Assistant, and Apple’s Siri. Installing a video doorbell, smart door locks, and a programmable thermostat is fairly simple and won’t put a large hole in your pocketbook. But these are things that are almost a necessity with millennial buyers.
Dedicated Home Office
Many of these millennial buyers may still commute to work each day, but even if they do, they still want a dedicated home office. If they do work from home, this becomes an absolute must. You can stage a spare bedroom as an office by simply adding extra outlets, a desk, and maybe a charging station for all of their electronic devices. Go one step further by adding a dedicated electrical circuit for that space. A Smartphone, a laptop, and a printer, plus all those added lighting options can use a lot of electricity.
Garages: From Just a Parking Place to Amazing
Garages used to be just a place to store a few items and park the car. Now, if it is well-designed, it can help to sell your house. Swap out that old, heavy garage door for a stylish new one with an automatic opener. Adding some simple shelving and storage options will make your garage appear to be spacious. Install bright lighting and put an epoxy finish on the floor. You now have a very appealing garage.
Purchase a Transferrable Home Warranty
Millennials are busy. The last thing they want to worry about is whether that dishwasher, A/C unit, or hot water heater may go bad soon after they move in. Providing a home warranty doesn’t cost much and it will give your potential buyer a sense of security regarding these potentially expensive repairs.
It’s important to understand who your potential buyers will be when you decide to sell your home. Millennials make up the largest group of today’s buyers, so it just makes sense that you do anything and everything you can to make your home appealing to this very discerning generation of homebuyers.
Article contributed by: Karl Kennedy Projectortop.com