The longer you’re a homeowner, the more reasons you have to weigh the option of buying versus renting a home.
An acquaintance of ours bought a new house a few years ago. She loved it — until, shortly after moving in, she noticed that a wall was sweating. The collected moisture had already ruined the wall itself and caused the flooring to warp.
Although a seasoned homeowner, neither she nor any contractor she called could determine what was wrong or how to fix it (if she could even afford to fix it). This wouldn’t be her last weird house problem, either.
While this anecdote might seem extreme, there are other compelling reasons to weigh the benefits of home ownership. We’ll discuss them here.
Home Buying Versus Renting a Home
After you’ve successfully landed your first “real” job and with several paychecks under your belt, it’s a good time to invest in a home. Whether you have a family or not, home ownership can be a wise investment for a young to middle-aged adult.
For most people, this is when they have the time and energy to make the new house a home by landscaping, painting, or whatever else might be needed. Later in life, they might be too tired or busy to spend time on all the household chores.
If you had a successful search for the “best realtor near me,” and you found your dream home early in your search, congratulations!
Home ownership brings its share of joys and challenges. It might take years of owning a home before you truly feel settled. Once you’ve processed all the upfront home-buying expenses, you might want to run for cover. Or back to your landlord!
The Initial Outlay
By the time you begin searching for a new home, you’ve probably saved the money for the cost of a house that meets your needs. But have you saved for other initial expenses? What about the following?
- Down payment
- Closing costs
- Mortgage fees
- Mortgage insurance
- Cost of moving
- Cost of buying essential new furnishings, like a bed for the guest room where your parents will stay or replacing the appliances the former owners kept
The Excitement of a New Home
For decades, even centuries, home ownership has been associated with prosperity and living the “American Dream.” And, indeed, there are advantages to owning your home:
- Doing what you want with the house and yard (provided you adhere to the local ordinances
- Paying off your mortgage and getting tax breaks instead of just paying rent
- Feeling “established” in a neighborhood
- Knowing that you’ve bought and are paying for your own space
Some Frustrating Realities of a New Home
Still, certain things can catch new homeowners by surprise—and they are not always good ones:
- When slapdash cover-ups engineered by former owners (or those who flipped the house) start to reveal themselves (do you recall the sweating wall?)
- When you grasp the idea that appliances and fixtures often need repairs and you have to pay for those
- When your party-hearty neighbors shoot off fireworks in their yard, terrifying your pets and causing you to worry about your house burning down
- When the realtor who sold you the new house comes by to mention that it has a septic system that she forgot to tell you about
Paying a Mortgage, Building Equity, and Staying Afloat
As long as you can pay the mortgage and other bills, you can build equity and boost your credit score. With proper budgeting, you should be fine.
If you cannot pay your bills as easily as you expected, we recommend financial advising or credit counseling to get you back in good financial standing and build the habits that will keep you there.
Other circumstances that could affect your ability to keep up with home maintenance and bills include:
- Unforeseen medical expenses or disability
- Decreases in home value
These concerns also can be dealt with if you seek the right help and resources as soon as you know there are problems. If you’re seriously struggling and all else fails, consider selling your home and going back to renting until things get better.
While it might be logistically difficult, it’s still an option.
Home Renting, Reconsidered
Isn’t it great that once your rental application is approved, you can move in as soon as your house or apartment is available? Just pay your deposit and first month’s rent.
Don’t you love having someone else be responsible for repairs and maintenance? And when you rent, you have no direct property tax bills—the landlord pays those too.
You can even build your credit score if your landlord reports your rent payments to the credit bureaus. Unfortunately, you can’t build equity in a rental property, and there are no tax benefits, either.
But in its favor, renting allows you to relocate quickly if necessary. And you can put all the money you’re saving on repairs and maintenance into a savings account.
The Pros and Cons of Landlords
Some people hate having a landlord because it cramps their style. Some landlords can be overbearing or intrusive. They might become testy, or impose penalties if the rent is late.
Landlords might seem fickle to their tenants. They can increase the rent, sell the property with minimal notice, or decide to assume occupancy and move into your place themselves.
However, there are some great benefits to having a landlord. For example, they’re responsible for all maintenance, both indoors and out, unless you damaged something through negligence.
We’ve learned that, generally, if you treat your landlord responsibly and with kindness, they will reciprocate. Just remember that landlords (or their property managers) are professional business people and not your pals.
Rent or Own?
Are you still weighing the option of buying versus renting?
The longer you live in a home you own, especially one needing a lot of repairs and maintenance, the more you might wish you still had a landlord to take care of things. It can be especially true if you are “of a certain age.”
After decades as a homeowner, some people start to feel like their houses own them instead of the opposite. They’re so busy with the upkeep that they have little time to relax and enjoy time with friends and family.
If you’re interested in other home-related topics like this one, we encourage you to continue reading our thought-provoking articles.