Live in a rental property for a few years, and you’re bound to start wondering about the advantages of renting vs buying a home. Renting might seem fine at first, “but once you have enough money to put down on a home, then it makes more sense to buy,” explains Deacon Hayes, personal finance expert and founder of Well Kept Wallet.
Are you looking to become a homeowner but not entirely sure what that might entail?
Here are some of the benefits to consider once you transition from renting to owning:
Major life transitions often require extra elbow room. Whether you’re starting a family, launching a business, or moving in with an elderly relative, boosting your square footage can lead to a more harmonious household. Forget window shopping for furniture that wouldn’t fit, or renting a storage unit for your extra stuff. In your new home, you may have more space for your lifestyle.
Your property, your rules
Say goodbye to the days of dealing with disagreeable landlords. After years of dreaming up the perfect kitchen or garden space, you can finally create a home that reflects your personality. When the real estate agent hands you the keys to your kingdom, the house is yours to do with as you please (just be sure to check the local zoning laws and homeowners association (HOA) regulations).
Unlike a rental property, the money you spend on renovations or an decor makeover will be an investment in yourself and your future. “Owning a home allows you to stop throwing money away each month,” Hayes says. “Once that home is paid off, you will feel like you got a raise because one of your major expenses will be gone.”
Each month that you own a home, you build equity, which is defined as the market value of your home minus the amount you still owe on your home loan.
According to Hayes, “Buying a home is better than renting because you can build equity. With renting, you will never see that money again. When you buy, the money gets applied to your principal, and you gain equity.”
Aside from paying off your mortgage, you can increase your equity by increasing your property’s value through renovations. Equity helps foster financial security for some homeowners.
Finance of America Mortgage may be able to help you turn your dreams of homeownership into reality.