America is, and always has been, a country of homeowners. According to the U.S Census Bureau’s Second Quarter 2019 Residential Vacancies and Homeownership report, 64.1% of all Americans own their homes. Before you commit to buying a piece of real estate (and the monthly mortgage payment that’ll doubtless come with it), you should weigh the pros and cons of owning a home.
The Pros of Home Ownership
Investing In an Asset
Paying $1,500 a month on your mortgage payment isn’t exactly fun, but it serves a greater purpose. Every payment that you make toward your mortgage increases the equity you have in your home. Eventually, over the course of 15 or 30 years, you can pay off your mortgage entirely and own your home outright.
In other words, it’s an investment, one that gives you the significant benefit of creating an asset. You can sell your home for a huge profit, pass it down to your children, or use it for a reverse mortgage. Regardless, it is yours to make the most of. Contrast that with monthly rental payments. You can stay in the place for decades, but at the end of 10, 15 or 30 years, you have no larger a stake in a home than you did at the beginning.
Make Your Own Modifications
Have you always dreamed of beautiful hardwood floors or a backyard pool? When you buy your home, you can make any changes that you want. Short of restrictions enforced by your Homeowners Association (HOA) or township, you have total control to make the modifications that will turn your house into your dream home.
Have a Lasting Place to Call Home
Call a rental unit “home” doesn’t always feel authentic. You know it’s temporary, and you don’t really feel like the property is yours. All of that changes when you buy a house. It becomes a sanctuary for you and your family, a place that is all yours and nobody else’s.
This is especially important if you crave a sense of community. You have the opportunity to lay down roots in your area and make lasting memories.
If you’re financing your home, you can deduct the interest portion of your mortgage payments on your income tax return. This means that the interest you pay on the loan (which probably totals thousands of dollars each year) reduces your taxable income for the year. Getting a deduction definitely takes the sting out of those monthly bills. Again, contrast that with rent payments: no tax breaks there.
The Cons of Home Ownership
High Costs of Maintenance
Something is always going wrong or needing fixing in a home – and you won’t have a landlord or property manager to foot the bill for repairs. That broken water heater, leaky roof, and cracked driveway will be your responsibility to take care of. Make sure you maintain excellent home insurance to cover unexpected issues, including natural disasters and flooding.
Difficult to Move
Every benefit creates its own potential drawbacks. In this case, the roots you put down in your new home will make it difficult to move in the future. Not only will you feel disappointed to leave a place you know so well, but you’ll also be forced to prepare your home for showings and spend money to list it on the market.
Real estate is a notoriously illiquid asset. Some homes sell in mere days, but others sit on the market for months or years. If you do decide to move, try to time your home listing during the busy season to speed up the process.
Finally, homeownership equals impossible-to-avoid responsibility. These responsibilities come in all forms, from safeguarding the house when you’re away to adhering to your HOA’s strict rules to mowing the lawn before your grass turns into a jungle. Every clogged drain and broken appliance is your problem to handle, and ignoring those responsibilities only creates more chaos. Not to mention, hurts the value of your asset.
If you’re up to the challenge, owning a home is a rewarding and exciting experience. Just make sure you’re ready for it.
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