Buying a Home vs. Renting
The debate between renting and buying is a never ending one. There are valid points on both sides, and, frankly, the only thing that really matters is what situation you are in and what is right for you. There is a host of reasons why renting is good, and yet another host of reasons why buying a house is good; it all depends on you. But, the reasons to buy a home are quite strong and are both monetarily and even psychologically beneficial. So, if you are not a homeowner yet, then we, at the Hughes Group, strongly suggest you consider it, and here is why:
#1 Mortgage Payments are More Constructive than Rent Payments
First off let's talk about price. Many people think that if they want to save money they'll just rent instead of buying. Well, they may be right in some situations, but that is not the usual case. For starters, the average price for monthly rent in Boise is between $800 and $1000 which just so happens to be the same amount as an average mortgage payment. This similarity in price makes renting to save money an invalid point. Now, of course, there are exceptions; there are some apartments that are lower in price than that, and some that are higher - but, in the long run, they are very much the same.
What about benefits? When you pay the rent every month what do you get out of it? A place to live. What about a monthly mortgage payment? The same? No, not even close. You see, when you pay the rent on your apartment or rental home, you are only buying a month's worth of living, but with a mortgage, with each payment you are one step closer to owning your home completely. It is not uncommon for people who rent for long periods of time to find out that with all the money they spent on rent they could have bought a house.
#2 Mortgage Payments are Steady
When you sign the papers and finalize your mortgage, you agree on a specific monthly payment. Now this payment could be for $800 a month or it could be for $953.21, it doesn't matter. The thing that matters is that it won't change at all. Even if the housing market rises or falls, your payments will still stay the same - which cannot be said for rentals. Once your lease is up, which is usually no longer than a year, the rent is subject to change. It is a terrible thing to live with - wondering if you will be able to afford your next year's lease.
#3 You Get to Call the Shots
When you rent an apartment or a house it is not your property so doing any sort of changes or modifications to it need to be approved by the one who does own it, the landlord. This applies to the simple and the dramatic - whether it be just decorating or adding on. Now, if you think about it from the landlord's perspective it makes sense why everything should be passed through him or her, it is their property. So it makes sense, even though it is unfortunate for you.
#4 You Get Borrowing Equity
When you have a home or a car, or any other asset that is of high value, you can borrow money against it, which essentially means that you put it up as collateral in case you default on the loan. These are sometimes known as a second mortgage. The benefit to these loans is that you can get the loan a lot easier, and can get a loan for a much larger amount since the house you are borrowing against is worth quite a lot. The only bad thing about borrowing against your home is that, if you default on the loan, they can repossess your home in some cases.
#5 Your Home Can Make you Money
When you own your home, you can do just about anything with it as long as it is lawful. In an apartment or rental home, however, this is not the case. Some of the cool options you have for making money with your home is to a) rent a room out, b) rent out space for parking or c) rent out part of your yard for people to grow gardens. Now, there are more ways for you do make money with your home. For instance, you can install solar panels and, if they generate more than you need, some will be sent back into the grid for the power company to use and you will get a nice check at the end of the month.
So, making money with your home is just a matter of imagination -- the ideas from which would go to waste in an apartment.
#6 Your Home's Value Could Go Up
The real estate market is much like the stock market, it rises and falls at a moment's notice. This volatility in the short term, however, translates into steady growth or decline in the long term. So, depending on when you buy your home, the price could go up or down over the time it is in your possession. This can mean that you will make money when you sell it again, instead of losing money.
#7 If Your Home is Destroyed, You Still Have the Land
Land is one of the most stable investments because it can almost always be used, no matter what has happened to it. There are some cases where that is not true, but, for the most part, even if your home burns down, you still have a solid investment in the dirt on the ground. Even if there is an earthquake, flood, or any other disaster, your land is still secure - in the majority of cases.
#8 You Don't Have to Worry About Eviction
Being evicted is a terrible thing and it can happen for a number of reasons. That is the reality, however, that you have to live with when you rent a home or apartment. It belongs to someone else and they have the right to use it as they wish. (Eviction while you have an existing lease agreement, is less likely unless you did something to breach the contract).
However, when it comes to your home, you won't have to worry about being evicted because you were a little noisy or because a better offer came along for the owner. You are the owner, and the home is your home.
#9 In Your Own Home You Can Save More Money On Energy
Now, when you are in an apartment, there are plenty of ways to save energy, but you are still limited to what your landlord approves or doesn't approve. For example, if you want to put up tinting on the windows to prevent your home from heating up, the landlord may tell you that you can't do that because it changes the appearance of the apartment too much - then you're stuck with rising air conditioning bills. But if you are in your own home, you can put up all the tinting you want. You can also put up thicker curtains, or solar panels, or wind turbines, or anything else that might help save you energy with no landlord to seek approval from.
#10 Your Monthly Payments are Customizable
When you rent a home or apartment the rent is most likely non-negotiable; you are stuck with whatever offer they give you at the time. However, when you buy a home, depending on the kind of mortgage you get, your monthly payments can be different. Usually, mortgages are set up to be for either 15 years or 30 years. The 30-year plan usually means lower monthly payments where, in contrast, the 15-year plan will have a higher payment. So, if you want to pay lower payments but not own the home for a longer period of time, then the 30-year plan would be better for you, and if you want to pay it off sooner and don't mind the larger payments, the 15-year plan would do.
#11 You Have a Place to Call Home
Probably the strongest psychological reasons for buying a home is the desire to be a homeowner. There is a sense of accomplishment and stability that comes when you own your own home. This sense of accomplishment and stability will make you feel more connected with the house and you will be able to truly call it your home. No more worrying about moving around when your lease is up, or worrying that you might get evicted, it's just you and your home.
Lastly, it is important to readdress the importance of financial readiness when it comes to buying a home. There is no shame in, and nothing wrong with, renting while you prepare yourself to buy a home. The process takes a while, but if you don't prepare properly it can backfire on you and become a curse instead of a benefit. Talk to one of our agents today and they can help you get on the path to owning your own home. They are experienced and have resources that can help you get from where you are to where you want to be. Call the Hughes Group today!