Buying your home used to be part of the American dream, but in recent years the percentage of home buyers has dropped dramatically for a variety of different reasons.
Much of it is down to the last financial crisis caused by the subprime mortgage lending policies of many banks. This left millions of people either facing foreclosure, behind the mortgage payments or living in a home that they could no longer afford.
Although the price of housing plummeted for a few years, homeownership rates continued to fall since the early 2000s and less than 66% of people own their own homes compared to over 70%, 15 years ago.
But this looks set to change as a new generation of potential homeowners are coming on the market. Rents continues to rise throughout the country, to the stage where purchasing a home is becoming more affordable and cost-effective.
A recent survey found that in 95 out of 100 metropolitan areas renting is now more expensive than buying a home.
if you’ve been struggling with the decision surrounding buying versus renting a home here are some reasons given by experts that explain home ownership is more suitable than renting
1 Save money on your energy bills
When you own your property, you can instantly start making improvements to it. As the cost of energy continues to rise and you can do many things to help reduce your monthly utility bill.
When you own your property, you can make changes where and when you want. However, as a renter you may be limited to turning off your lights and unplugging appliances that are not in use.
As a homeowner, you can make dramatic changes such as installing more energy-efficient windows, doors, and even a roof or adding solar panels.
2 Do what you want with your own space
If you’re not happy with your home and you want to change it, it’s up to you, don’t have to consult with a landlord.
Major changes such as knocking down walls to create walking wardrobes, master bedrooms, and larger ensuite bathrooms can be done as you are free to make these decisions. Worries about losing deposits will now be a thing of the past.
3 Decorate and furnish as you like
When you purchase your own property, you’re not limited to the type of furniture you can buy.
Sometimes in furnished apartments, you’re stuck with what your landlord gives you. If you’re renting an unfurnished apartment, you still have to work with the space you’ve given.
When you own your own property, you can take your time and handpick the furniture that will be with you for years to come.
4 Learn to be more financially responsible
Once you commit to monthly mortgage payments, you’ll begin to routinely set aside money instead of randomly squandering it on nights out, new clothes are the latest technology.
Buying their first home for many people is the most significant investment in their life. Once you learn to manage your finances, manage your home and pay your mortgage off. There is every chance you will walk away with a significant payoff.
5 Get your foot on the property ladder
Many homeowners learn from their first property purchase.
Some then choose to purchase secondary and additional properties as they realize the value in monetizing on property ownership, and take the step towards becoming landlords themselves.
Even in your initial space, you could use Airbnb to rent out a spare room.
6 You never have to deal with a landlord again
I was going to put this further up the list, but to be honest, in the 5 years I was renting before I purchased my first home. I never had an unpleasant experience with any landlord.
Unfortunately, this is not the case for some of my friends who went to sudden refusals to negotiate new leases, eviction notices because landlords sold, and unwelcome visits from landlords who just simply wanted to harass people.
Whatever the reason, one of the major benefits of buying versus renting a home is that you are the boss and you never have to worry about dealing with the landlord ever again. You might have to deal with neighbors and homeowners associations, etc.
7 Get problems solved on your own timeline
Anyone who’s experienced renting a property understands the frustration attached to getting problems solved. Whether your toilet isn’t flushing or your dishwasher is broken if you’re renting these problems are usually solved according to your landlord’s timeline.
Thankfully, when you buy a home, all you have to do is pick up the phone and contact the expert you need yourself, You will have to foot the bill unfortunately, unless it is covered by your warranty or insurance.
8 You can fix your mortgage repayments
If you choose a fixed-rate mortgage, you know the amount you’re going to pay every month for the term of the mortgage.
This financial security doesn’t exist in the rental market. If your landlord’s fixed costs go up, there’s every chance that your rent will rise accordingly.
Today, if you can afford a 20% down payment, the ridiculously low-interest rates make fixed mortgages an extremely attractive prospect as you can lock in no mortgage payments and protect you and your family against the next recession.
9 Buying your home is an Investment
If you can afford to buy a home instead of renting it, the decision to continue to pay rent is effectively just throwing your money away.
You get a roof over your head and exchange for your payment, but effectively you get nothing else. If you purchase the property instead, every payment you make helps you build equity in your home and adds to its value.
As the value of your property increases, you can either sell it or tap into equity should you need an influx of cash.
Of course, I understand that currently the debate of buying vs renting a home isn’t this straightforward for many people.
Although they may afford to purchase, they may have an uncertain career future like the freedom to move are just not being a position to make the down payments.
Also, there are additional transactional costs to home ownership, especially if you don’t intend to stay in the property for very long.
Whatever your reasons for renting instead of buying, just remember, that buying a home will if nothing else to add a level of stability to your life that you have yet to experience.