Owning a home and having a steady mortgage payment over the inevitable rent increase realities has been a benchmark for many. But as highly dreamed about as that is, there are over 43+ million Americans who rent instead to save on monthly costs. However, though renting might work well for some in the short term, there is no denying that there are massive benefits of home ownership that simply cannot be replaced by renting.
1. Cheaper in the Long Run
Buying a house is typically going to be more expensive initially, and renting looks like the cheaper route, but only for a little while. If you take yourself outside of the “right now,” home ownership can actually be relatively less expensive than renting by looking at the long-term effects. As long as you play your cards right, such as paying 20% in a down payment to avoid PMI taxes and buying during prime times, you can expect to have more money in your pocket, especially when you finally pay your home off.
2. Improves Your Net Worth
Did you know that home owning is a fundamental way to build your own net worth? Sure, you can increase your wealth through other means, such as investing, but home ownership is the most tried and effective way to reach that goal quickly. According to a Financial professor named Sebastien Betermier, about 67% of the average person’s total wealth comes from their home. Yes, that percentage can vary, but it is a promising fact that owning a home can still offer significant advances for your collective net worth if that is one of your missions in life.
3. Allows You to Build Equity
Owning a home means you are building equity for yourself. You are paying into a property that you will eventually own rather than throwing away money towards something that will never be in your name. What is even better about this is that if you buy a home for $200,000, but raise the value to $225,000 through renovations, your equity increases, but the mortgage value you still owe does not.
4. Stable Environment
When you opt to become a homeowner, you have a stable place that you can call your own without any constraints. You are not obligated to answer to someone else (such as a landlord), and you are free to live as you wish. As long as you make your mortgage payments, the house is yours. In addition, if you chose a fixed mortgage interest rate, what you pay is going to be the same the entire duration of your loan. So, there is no need to worry about rent increase or eviction risks (which can still occur even if you are paying your rent on time).
Conclusion – Initial Investment for Long Term Benefits
The price of home ownership is the leading reason why so many choose to rent instead. The upfront costs tend to look daunting, and it might very well feel overwhelming. But if you do your due diligence, have good credit, and shop within your budget, there is something out there for you that can fit your lifestyle perfectly. Plus, you can get some very impressive homeowner tax benefits, which is an added bonus. Overall, the benefits outweigh renting on nearly every futuristic front, and is a highly suggested option to take if you want to foster wealth and live a more financially balanced, self-sustaining life.