The Advantages of Buying a Home Vs. Renting

advantages of buying a home vs. renting
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For many years, renting a home was a less expensive alternative to buying a home. While renting is more flexible, buying has the bigger potential long term payoffs. Here are 4 advantages of buying a home vs. renting.

The Advantages of Buying a Home Vs. Renting

Home Ownership is a Built in Savings Account

While renting a home may seem like less money per month, think about where the money is going. Every month you write a check to your landlord, and you don’t see that money again. With a mortgage payment, you pay down the mortgage and increase your equity. In this fashion, home ownership helps you build wealth. Additionally, with rent prices increasing and home prices staying relatively steady, make sure to evaluate what it would cost to rent vs. buy, because you may be surprised!

Paying a Fixed Mortgage Stabilizes Budget

As anyone who has rented a home knows, especially in urban areas, rent hikes are the norm and are often out of your control. If you’re in an area without rental control, the landlord can raise the rent to whatever he or she likes. With a mortgage payment, you are agreeing to pay the same mortgage amount every single month for the life of the loan – 15 or 30 years. This helps you budget accurately and know exactly what to expect every month.

Personalization

Perhaps one of the most exciting advantages of buying a home vs. renting is the freedom to personalize your home. This means you can paint, add on rooms, and knock down walls if you so desire. With a rental, you have very tight restrictions, so you are likely unable to personalize the home however you want.

Tax Advantages

Buying a home comes with great tax advantages. Homeowners can deduct mortgage interest on their federal income taxes. This is a hefty deduction for most because interest payments are often the largest section of a mortgage payment in the first years of owning a home. There are also some closing fees and property taxes that you are also able to deduct.

Growing Your Roots

It’s hard to feel established in a neighborhood if you are moving every year. Buying a home really allows you and your family to really settle in and create a community. When you know you’re going to be in the house for a while, it’s easier and more natural to build long lasting relationships with your neighbors.

You may also like: How Much House You Can Afford

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