The Rewards and Realities of Homeownership
As with anything in life, you'll find advantages and disadvantages to consider in regards to deciding if homeownership is the best option for you. It's important to look at both the rewards and realities of homeownership before you commit to one of the largest financial investments you can make.
THE REWARDS OF HOMEOWNERSHIP
Invest in your future
Your monthly mortgage payments are not going into the pockets of a landlord. Instead, with each payment, you build equity in your home and contribute to your own long-term, personal investment.
Lighten your tax load
You'll find homeownership opens up a world of potential tax savings. Typically, the interest paid on your mortgage is tax deductible which can provide significant financial relief. To discover all the possible tax advantages available to you upon purchasing a home, it's best to consult with a trusted tax advisor.
Develop your credit further
Homeownerships is one of the best investments you can make. Additionally, making monthly mortgage payments on time will further improve your credit history and will help you with future and additional investments.
Remove questions
With homeownership, your monthly payments are no longer subject to increases by the renewal of a lease and the discretion of a landlord. This will help you make a long term budget plan and remove variable factors in your future financial decisions.
Find freedom
With the only potential parameters being homeowner association guidelines or city codes, you are able to remodel, renovate, and redecorate according to your own personal tastes. You are free to make your home your own - however you see fit.
THE REALITIES OF HOMEOWNERSHIP
Know the numbers
Certain renting situations provide coverage for the expenses of some or all the utilities. This is not the case with homeownership. Not only will the utilities be the responsibility of the homeowner, but property taxes and homeowner's insurance also will be additional expenses.
Expect repairs
There's no more calling the landlord to fix what might be broken. Any repairs and maintenance that are required on the home and/or appliances will be your responsibility. And, you can expect that these will always come with a bill or invoice to pay.
Stay put
Renting provides flexibility. You regularly are given an opportunity to resign a lease (or not) and suffer only minimal penalties if you decide to break the lease prior to the time of renewal. On the other side, owning a home is a long term investment and will be more financially beneficial the longer you stay in the home. Project ahead; can you see yourself happy in that home and in that neighborhood 5 to 10 years down the road? Deciding to move out of a home does not remove your financial responsibility as the home owner; plus, the process of selling a home can be a time consuming and costly endeavor. It may not happen as quickly as you would like or hope.
Be ready to gamble
The housing market is perpetually unpredictable. While the hope is that the home will appreciate in value over the time of ownership, this is not always the case in every market. If and when the time comes to sell your home, be prepared for whatever condition the market might be at the time. Housing prices could be down, the market may be slow, and the home may have depreciated in value. Owning a home is typically a sound investment, but it provides no guarantees.