Pros and Cons of Buying a Home

Buying a home is a huge step for anyone who has never done it before. With pride of ownership comes lots of financial responsibility, and for some, the decision to buy can be difficult. If you’ve been a renter, there are many aspects of homeownership to consider before taking the plunge. First, let’s talk disadvantages.

Maintenance: it’s all you

When you own a home, you are solely responsible for its maintenance and, where applicable, the upkeep of the surrounding property. This means that when the weather is warm, you should expect to spend time cutting grass and trimming the hedges. When it snows, you’re the one who will be out there, shoveling the sidewalk in the cold.

You should also budget in extra time for general home upkeep and maintenance. As a renter, you’re probably not concerned with preserving things such as flooring and carpeting. Why should you be? Security deposit aside, it’s really not your problem. However, when it comes to your own home, you’re bound to be a lot more diligent, which also means that you should expect to spend a lot more time wiping spills off hardwood floors, scrubbing the shower, and cleaning food remnants off of the countertops before they set in. Make sure that you’re ready and willing to put in those extra hours before you commit to buying your own place.

Higher costs

Homeownership will probably be more of a financial burden than renting. When you own a home, you must pay property taxes, which in some areas can be almost as high as the mortgage payment itself. You are responsible for paying for repairs when high-profile items break, and homeowners insurance costs more than renters insurance.

With rental agreements, many monthly rent payments include certain utilities such as water and heat. If you own your home, then you will be responsible for all of your utility bills. Furthermore, some bills might pop up that you never knew existed. In some towns, garbage collection is not included in the cost of property taxes, which means that homeowners are forced to pay a separate fee in order to have their trash removed. In other cases, homeowners have to pay a sewer bill in addition to the water bill. If you are considering purchasing a home, then prepare yourself for all the sneaky little costs that can quickly add up.

A place to call your own

Owning a home gives you the opportunity to build equity in something that will eventually become yours, as opposed to contributing to somebody else’s mortgage by paying rent. Paying your mortgage is a way of investing in your future, and while property taxes never go away, there will eventually come a day when your mortgage is paid off and your home is truly yours.

You’re the boss

When you have a landlord, you have to play by his rules. However, if you are your own landlord, then you get to dictate what goes on inside the home. You can go ahead and get that dog, or paint the living room walls a vibrant shade of blue; when you own a home, you call the shots.

Tax benefits

As a homeowner, you are able to deduct your mortgage interest on your taxes, which will lower your tax burden overall. There are also certain tax benefits for home improvements and making the home more energy-efficient.

Stability

Every renter faces two risks that can result in a tremendous amount of upheaval. The first is the risk of an increase in rent. If you find yourself in a rental situation where your neighborhood has gone from glum to glamorous over the course of a few years, then you might wake up one day to find that your rent has suddenly skyrocketed. Even if your unit is rent-stabilized, this does not prevent your landlord from gradually raising your rent over time.

The second risk involved in renting is the fact that once your lease expires, your landlord is no longer obligated to rent to you. Many renters have found themselves in situations where the landlord either wants to sell the rental unit in question, move back in himself, or rent it to a family member or friend. As a tenant, you could find yourself in a situation where you have to move whether you want to or not.

By owning a home, you are guaranteed to be able to reside at your property for as many years as you see fit. As long as you are able to pay your taxes and mortgage, nobody can kick you out. Also, if you have a fixed mortgage, then your monthly payment can’t unexpectedly go up, which means no more marathon number crunching sessions every twelve months or so to see if you can afford the higher rent.

The stability that comes with owning a home is especially important for people with children. Imagine having to move your child to a new school because your landlord wants his apartment back and no available units are in that same district. Of course, owning a home does come with far more variable costs than renting. Even so, it’s hard to put a price tag on stability.

The bottom line

In the grand scheme of things, you’ll probably pay more on a monthly basis for owning a home as opposed to renting one. Between mortgage payments, property taxes, added bills, and maintenance costs, it is unlikely that your own home will be cheaper than a rental situation in the same or comparable neighborhood. On the other hand, owning property comes with its fair share of advantages, from tax benefits to the freedom of knowing that you make the rules. Being a homeowner isn’t for everyone, and it certainly comes with plenty of challenges. However, if you are able to take that step, then get ready for a lifetime of wonderful memories in a place that you, and only you, can call home.