Buying a home has long been part of the American dream. But with the housing crisis and financial uncertainties of the recent past, people are now more hesitant to make such a big financial commitment. In the end though, buying a home is still one of the best investments anyone can make.
So when faced with clients that are questioning whether they should buy or rent a home, real estate agents can help by explaining these benefits of buying over renting.
1. Homeowners Have Total Control of the Home
The ultimate benefit of buying a home is that the property is the homeowners’ to do with as they want without having to answer to anyone else. Homeowners have the luxury of completely personalizing the home while also increasing the property value. They can also handle repairs and maintenance in their own way at their own pace.
The same cannot be said for renting as renters are limited in what they can do with a space or property. And, when renting, everything has to go through the landlord. So, if something breaks or needs attention, the renters are at the mercy of the landlord’s time and attention.
In the end, owning a home provides people with more flexibility.
2. Homeowners can Capitalize on Financial Benefits
Buying a home is a good investment for a reason – most home values appreciate over time, depending on a number of factors, which means homeowners can build equity. According to a report from the Denver Post, U.S. home prices rose 3.3 percent January through October of 2019. To break it down, if someone buys a home for $300,000 with a 10 percent down payment and it appreciates 3 percent per year for 3 years, the homeowner will have gained about $27,000 on top of the down payment already invested.
That equity builds up over the life of the mortgage, which means if the homeowner sells in the future, they will walk away with more money. That simple ability to sell the home and walk away with cash is another key financial benefit of home ownership. When a renter is ready to move on, they simply leave without any options for getting monthly rent payments back.
3. Homeowners Don’t Have to Deal with Rent Increases
The interest rate on a fixed mortgage will never change, which means the cost of the house and the monthly payments will never fluctuate, keeping the home affordable as long as the homeowners are in the same income bracket.
The same cannot be said of renting. Rarely, if ever, does the monthly cost to rent a home go down. It does, however, regularly increase. In fact, research from the Urban Institute shows that rent has grown faster than median incomes in many large metropolitan areas across the country. This means that paying a mortgage is often more affordable than paying rent in the long run.
4. Homeowners Enjoy Tax Benefits
Owning a home comes with certain tax benefits. Homeowners can deduct their mortgage interest and property taxes every year. There are also opportunities to deduct interest on home equity loans and some closing costs when buying a home. The exact amount of these deductions depends in individual situations, but these tax benefits equate to significant savings that are not available to renters.
These are just some of the key benefits to owning a home instead of renting. The other factor to consider is the pride that comes with being a homeowner. Combine that with the greater stability of owning a home, and the choice for most people looking for a home is going to be to purchase a property.