Owning a home is a major financial decision, and it’s not for everyone. But if you do decide to buy, there are some advantages to consider. Owning your own home can be a smart financial decision if you’re planning on living there for at least five years or so.
You’ll get the stability of knowing that your monthly housing payment won’t change much year over year, while rent will likely go up each time you renew your lease agreement. And while many people buy homes with the intention of selling them as they move forward in their careers, others plan on staying put indefinitely and building equity over time instead.
You can save money on housing.
The main advantage of owning a home is that you can save money on housing. The exact amount of your savings will depend on several factors, including:
- Where you live (the cost of living) and how much space you need
- How much money you have saved up for a down payment and closing costs
- The property taxes you’ll owe
The benefits of home ownership can be long-term.
Owning a home can be a good investment, as it allows you to build equity over time and enjoy its benefits for years to come. In addition, homeowners may qualify for tax breaks such as the mortgage interest deduction and capital gains exclusion when selling their home at a profit.
You get to customize your home to your liking.
When you own a home, you can make changes as you see fit. You can change the layout of your home or add extra features like a pool or garden. You can change the color of the walls and paint if you want to make it more personalized. Or you can add built in shelves or other customized features that aren’t possible when renting.
Your home may increase in value over time.
Home prices can go up and down, but over time they tend to increase in value.
If you buy a house with the intention of staying in it for at least five years and then selling it at a profit, this could be an advantage over renting because you’ll get some money back from the sale of your home as well as having had somewhere to live while it was increasing in value.
You don’t have the expense and hassle of frequent moves.
Some people prefer to live in one location for an extended period of time. For example, you may want to stay put while your kids attend the same school or after retirement because you’re close to family members who live nearby.
If this is the case, owning may feel better to you, knowing you have a permanent place and won’t have to consider moving due to your apartment building being sold, or the rent being raised too high.
How do you know if it’s right for you?
Owning a home makes sense for some people, and not others. It depends on your financial situation, lifestyle, and goals.
Owning a home may be better than renting if:
- You have enough money to make a down payment and pay off the mortgage in less than 20 years (the average length of time most people stay in their homes).
- You plan on staying in one place for at least five years or more.
- You want to build equity
Owning a home is a big decision, but when the time comes, it comes with big benefits over renting.