The Benefits of Owning vs. Renting
There are some common misconceptions people have when considering their next place to live. The choice between owning and renting can seem like a difficult one, but when you look at it closer, you’ll often find that homeownership is the right choice. Although the initial price tag might scare potential homebuyers off, owning a home can be less expensive and a better investment in the long run, especially with today’s low mortgage rates. To help you navigate the confusion, we’ve put together a list of benefits of owning a new home.
1. Freedom to Personalize
Owning your home means that you have the freedom to make any changes you want without getting permission from a landlord. More often than not, landlords have strict rules in place that prohibit tenants from doing things like painting, renovating, or even putting nails into walls. As a homeowner, you’re able to change your home as your family needs or design trends shift. This also allows you to make improvements to your home that can add re-sale value to your investment. Keep in mind that a new home will have even less cost associated with repairs and maintenance.
2. Smart Investment
Most people don’t fully understand the stock market because it is something intangible and uncertain, but homeowners feel more comfortable with their investment in a home because it’s something that they see and live in every day. Financially, homeownership can even be a better investment than the stock market. Your home appreciates in value more than a typical portfolio of stocks because you get the appreciation on the entire home’s value, rather than just the gain on your down payment. This appreciation value can potentially offset some costs you put into your mortgage payments over the life of your loan.
3. Tax Benefits
Homeowners are allowed to deduct mortgage interest and property taxes when they file tax returns each year. These significant savings from tax benefits can often cover a percentage of your monthly payment and make owning similar to, or even cheaper than, renting. You’re also exempt from paying taxes on the money you’ve gained when you sell your home.
4. Fixed Monthly Payments
Many people elect for a fixed-rate mortgage meaning that their monthly mortgage payment will never change. Renters, on the other hand, have the constant worry of price increases to their lease each year. Since the mortgage payment is a large portion of the cost of living for a homeowner, a fixed-rate can create great budget stability. With historically low rates right now, a long-term fixed mortgage is extremely attractive to many potential homebuyers for these reasons.
5. Forced Savings
Homeowners with mortgages are forced into investing in their own home by nature of the loan structure. The average required pay-down increases each year, which causes you to invest more into your home in which you likely will benefit from appreciation later. Contrast this with renting in which you’re giving up the entire monthly payment directly to the landlord.
More often than not, renters are locked into a long-term lease (typically 12-months), with no buyout clause or a large fee to break the lease terms. If you own your home, you’re afforded more peace-of-mind knowing that you can list your home for sale if any unexpected life events occur.
So, not that we’ve outlined some of the most important benefits of owning a home, it’s important to consider a new High Performance Home as you start your search. A new Energy Efficient home will allow you to take advantage of minimal heating and cooling bills, fewer maintenance costs, and higher resale value with a home built for the future with advanced building systems.