Home Ownership Vs Renting
For decades, home ownership has been considered an integral part of the American dream. But does all that hype really add up to a good investment, or could renting actually be the smarter financial decision in some cases? The answer…is complicated. In this article, we'll take a look at the pros and cons of both owning your own home and renting.
● Stability or Flexibility
- The first question that you will need to answer when considering home ownership is how much you value stability versus how much you value flexibility. If you dream of settling down and spending a large part of your life in the same neighborhood, then purchasing a home is a great way to accomplish this goal in a comfortable and financially sound manner. If, on the other hand, you enjoy regular changes in scenery, if your line of work requires you to change location frequently, etc, then renting may offer the flexibility that you need. After all, the costs associated with changing apartments at the end of a lease pale in comparison to the costs and hassles of selling a home.
● Equity vs. Low Expenses
- The age old argument for home ownership is that each payment you make on your home contributes to your purchase of a major asset. (The house itself.) However, it is important to consider that, while this is true to an extent, there are also many additional expenses that you take on with home ownership, such as maintenance, homeowners association fees, property taxes, and, most importantly, the interest on your mortgage.(which can sometimes nearly equal the value of the house you are buying!)
● Choosing your Responsibilities
- Owning a home also tends to entail more responsibilities: maintenance, lawn care, homeowner’s association meetings, etc. tend to eat up a great deal of time ‐ this is one reason why some working professionals opt to rent instead of own.
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