On the previous blog post, we talked about the different reasons why renting a home is the better option for you. Now, let’s discuss the other side of the coin – home ownership. Like renting, owning a home has its pros and cons too that’s why it’s very important to understand them fully before we decide to invest in one. Is it really an American Dream or more of a nightmare?
Aside from the obvious perks like having your own space to decorate, reconstruct or just do whatever with it according to your preferences, owning a home means that you have an asset that can be sold in the future or used as collateral if needed. It’s a long term investment because over time, the value of your property can increase. On the other hand, there are chances of it declining too with the economy being unpredictable these days. Staying in the financial aspect, as a homeowner, you have the ability to write off your home on your tax returns while renting one won’t give you any tax benefit.
Home ownership gives you the pride of ownership, sense of stability and belongingness in a community. It works out well for those who have decided to settle in one place and has no reasons of jumping from one place to another.
Owning a home is expensive. Let’s just put it out there right away. Investing in a house costs a lot of money and that doesn’t stop there. There are a lot of utilities, maintenance and expenses that you need to pay continuously as a home owner as compared to just renting. Here are some of those:
- Property taxes
- Mortgage interest
- Homeowners insurance and other types of insurances
- Repairs and maintenance
- Water and sewer service
- Trash pickup
- Pest control
- Renovation projects
With all these costs that continue to add up and unpredictable expenses that come and go, you will never really be able to know exactly how much money you would set aside for your home budget. So if you are not financially stable, I don’t think that Home Ownership is the best for you.
There’s really no definitive answer whether or not to buy a house. What you should do is assess your financial and living situation, and weigh the pros and cons – see if the bad outweighs the good and if you are willing to risk the big investment. Don’t just look at the present, but also the future.