As far as investing and building a safe and secure future is concerned, the standard thinking of most Americans goes something like “Your home is your biggest investment.” In line with that thinking, most Americans have dutifully placed homeownership at the top of the list of their life goals.
But is this true?
Should you prioritize homeownership as much as you are expected to? Or is there some wisdom in renting your home versus buying it? This is a question many people are starting to ask and if you are reading this, you are probably one of those people. But given the importance of the issue, this isn’t a choice you can make lightly.
A home is central to your happiness and productivity in ways that no other physical thing in your life can be. Where you live matters to your relationship and opportunities. But do you really need to own that place? Or is it possible to just be as happy and successful in a rented home as in your own home?
This post will help you find the right answers to these questions.
Renting versus owning your home; which is better?
Those who say you should not make home ownership a priority argue that you will achieve financial freedom faster if you rent your home. But supporters of home ownership view buying your own home as the safest road to financial stability. The right option for you depends on a lot of factors, most of which are personal to you.
Buying your first home
Pros
- A home is a long-term investment with the potential for significant appreciation. The money you invest in a home will grow at a steady rate.
- In addition to value appreciation that happens as a result of market forces, you can increase the value of your home by improving its appearance and function.
- Owning your own home gives you a living space that is customized to your needs. You can design the space to suit your ideas of an ideal home.
- You have greater control of your environment when you own your own home. Owning your home gives you the power to decide whom you want as your neighbors.
- When you own your own home, you have a clear idea of how much you will pay every month in mortgage and other payments.
- One of the best reasons for owning your home is the stability it brings to your family. You can make decisions with certainty.
Cons
- The upfront cost of owning a home is high. In addition to the down payment for the home, you have to think of the closing costs for the mortgage.
- When you buy a home, you are responsible for fixing any damage to the building. In some months unexpected problems can cost you thousands of dollars.
- You cannot just pack up and leave when you own your home. You must stay in the location where the home is even if there are better opportunities elsewhere.
- As a homeowner, you must bear the burden of maintaining the home. This is an ongoing cost that you can never escape.
- You invest money in a home at the expense of other more profitable investments, buying a home ties up your capital for the long-term.
- Property markets are subject to boom-and-bust cycles which are unpredictable. You can lose your money if property values fall.
Renting your first home
Pros
- Your initial investment is significantly lower than your rent; often lower than your mortgage payments if you bought the home.
- In addition to paying less for the home you live in; you can predict your housing costs. You know how much you need for the duration of the lease.
- As a renter, you do not have to bother with the maintenance of the home you live in. This is the responsibility of the owner.
- Renting your home offers you the chance to live wherever you want even if you cannot afford to buy a house in that neighborhood. You are also free to move at any time.
- You have more capital at your disposal to take advantage of investment opportunities that offer better returns than owning your own home.
Cons
- As a renter, you have virtually no freedom to customize the home you live in; you are stuck with the landlord’s design even if you hate it.
- You are also at the mercy of the landlord, as far as your living cost is concerned. The landlord can increase the rent at the expiration of your lease.
- Renting does not offer the benefit of long-term contributions to a property you will eventually own. Instead, you are helping the landlord pay off the mortgage.
- Lastly, renting your home comes with a fair amount of instability; your landlord can sell the home and you will be forced to move.
Renting vs Buying in Atlanta
These are the pros an d cons (though there are more) you should be aware of in Atlanta. But there is one thing most buyers absolutely should do. And that is to work closely with an experienced Atlanta agent. A local agent will have a thorough understanding of the local market and what it takes to help you get the house you want and the deal you need. So if you are renting or buying a house be sure to contact us today at 770-280-4560.