Pros and Cons of Home Ownership
Posted Monday, December 22, 2014
If you’re sitting in your apartment right now thinking: I wish I could paint it, but my lease doesn’t allow it, maybe it’s time to talk to a real estate agent about purchasing a new home. Before you rush off to the store to look at paint samples or, more importantly, sign on the dotted line of any mortgages, consider the pros and cons of buying.
- Financial Investment: Given the gloomy news on foreclosure rates across the country, it is easy to forget that buying real estate is also a means of saving and investing. The money you pay in rent to your landlord goes to your landlord; the money you put toward a mortgage goes toward building equity in your home.
- Pride of Ownership: By buying a home, you will be able to paint the interior walls any color, renovate to your heart’s content, put nails in the walls and know that it is truly your territory. As a homeowner, you have a level of control over your environment that renters lack.
- Putting Down Roots: Purchasing real estate is a commitment to a community, akin to staking a flag in the ground. You’re not just passing through, if you own your own home. Most mortgages are 15 to 30 years. Certainly, you can sell before that time is up, but with closing and moving costs and an uncertain market, the era of flipping houses for fun and profit is at a close. Buying your first home may involve considerations on other long-term decisions such as where you want to raise your children.
- Additional Expenses: Even if the mortgage you secure on your home is less than your current rent, home ownership comes with a lot of extra bills. You may not have considered the cost of yearly real estate taxes, insurance, repairs, and maintenance. If your water heater dies as a renter, your landlord is required to replace it. As a homeowner, you’re looking at the time and expense of getting it replaced yourself.
- Less Flexibility: Rental leases often include provisions for leaving before the termination of the lease. So, if you’ve decided to accept a job offer in Paris, while you might lose some money in security deposits, you can sever your connection relatively easily. That’s not the case with a mortgage. You are responsible for the payment on the mortgage whether you live in your home, rent it out while you’re in Paris or leave it vacant. Buying real estate is a serious, long-term commitment.
- Less Time: With most apartments, someone else is raking the leaves, shoveling the snow, mowing the lawn, and replacing that broken water heater. As a homeowner, those duties would fall to you or someone you hire to tend to those issues.
Whether you’re ready to stop renting and buy a home or you need more information before taking the plunge, I can help. Give me a call or email me today.