Last Updated on Mar 5, 2020 by James W
At first glance, renting a house has a lot of appeal. You have the freedom to move once your lease runs out, and you don’t have to worry about paying for repairs if something major breaks. The recent crisis in the housing market has further discouraged people from buying a home. However, renters aren’t really saving any money with their choice to rent instead of buy. They are, in fact, wasting it. Buying a house is still the more cost effective of the two options.
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#1. Owning Saves You In The Long Term
Although the price tag of a house may seem high, paying rent month after month with nothing to show for it is even more expensive over ten or twenty years. After you pay off a mortgage, the house is yours, and you no longer have to pay for anything except property taxes. In addition, monthly mortgage payments are frequently cheaper than monthly rents, especially in large metro areas. You can read more articles agreeing with this point of view in major newspapers and business journals, such as Forbes and the Huffington Post.
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#2. Buying A House Can Make You A Profit
After you finish paying off your mortgage, you own the house, and you can sell it to turn a profit. Houses almost always increase in value over time, and you’ll earn more than you originally paid for the house. Then you can move on to a bigger, nicer home. Or, you can hang on to the house and rent it out. If you buy a multifamily house or a house with extra bedrooms, you can live there and rent it out while you’re still paying off the mortgage. Making money off your home isn’t an option when you’re a tenant.
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#3. Buying Can Save You Money On Energy Costs
When you own your home, you can make modifications so that it’s more energy efficient. Installing a new air conditioner or washing machine may cost you money now, but it will pay for itself over time by drastically reducing the amount you pay for utilities. A rental property is owned by your landlord, and making energy efficient changes to the home isn’t going to benefit them in anyway. So you’re often stuck living in an outdated home that is costing you more money.
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#4. Rents Go Up While Mortgage Payments Don’t
Mortgage rates don’t increase with inflation, but rents do. If you buy a house, you’ll be paying the same amount in five years, but you’ll be paying more money for rent. Today’s interest rates are low due the housing market crisis, which saves you even more. Landlords can also raise the rent on you unexpectedly, which won’t happen when you buy. To learn more about what mortgage is right for you Read More for more information.
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#5. Homeowners Spend Less On Furniture
When you move every year or two, you are constantly having to fit your things into a new space. You may have to get rid of pieces of furniture in one place, but buy them again in the next. Over time, this can add up to a lot of money.
