Home Buying Advice
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Should I rent or own my home?

Before you even begin the shopping process, the first question you may ask yourself is, on the surface, quite basic: Does it make sense for you to buy your home? Finding the answer will require some homework, and perhaps even a bit of soul searching. Being a homeowner takes a considerable investment of money, time, and energy. Let’s look at the pro’s and con’s of home ownership.

The Pro’s
  • A place to hang your hat…and own the hook it hangs from. Let’s start with the basics. Owning your own place gives you peace of mind. If you are ready to settle down in your community, you’ll enjoy the established feeling of ownership.
  • Establishing Equity. When you own your home, each payment you make establishes ‘equity’ in your house. This is an ownership interest in the property that you can convert into cash when you sell the house. These are also funds which you can borrow against when you refinance or open a home equity loan in the future. As a renter, you do not have this option.
  • Static monthly payments. While your rent payment has a tendency to climb each year, a mortgage payment usually stays the same year after year, depending on your home loan. Inflation, for the most part, does not affect your mortgage payment. This assumes of course that your home loan is a fixed rate – an Adjustable Rate Mortgage could mean a fluctuating payment 3, 5 or 7 years down the road.
  • A home is generally an appreciating asset. Houses typically increase in value over time. A home you purchase for $75,000 today could be worth a lot more in 10 years. That extra money you realize through the sale of a house is yours.
  • Tax benefits. The interest paid on a home loan is usually tax-deductible. That’s a significant savings, particularly in the early years of ownership, when the bulk of your payment is comprised of interest.
The Con’s
  • The costs. The increased costs of home ownership can take a big bite out of your budget. While you may be surprised to find out that your mortgage payment is actually less than what you were paying in rent, you need to remember the additional costs of property taxes, homeowner’s insurance, utilities, and general upkeep expenses. And while your mortgage payment is primarily static (as described above) these additional costs have a tendency to go up over time.
  • Less mobility. As a renter, you are able to move on relatively short notice. As a homeowner, it’s your responsibility to put your home on the market to sell it. This process can take months, and sometimes years depending on the market. If you anticipate a move in the next couple years, buying a home may not be a wise investment.
  • Repairs and maintenance. No more calling the landlord when something breaks. As a homeowner, it’s your responsibility to fix it. For many people, the thought of maintaining a home and the yard that surrounds is not appealing. But don’t forget – condominiums are an option! Condos give you the power of ownership, while leaving the maintenance to a condo association.
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