The number of home owners in the United States is approximately sixty nine percent. That certainly gives the edge to ownership versus renting. Still, the purchase of a home is the largest major investment a person can make in their lifetime, so the question to rent or own is sure to arise. There are many factors to consider before a final decision should be made.
Owning a home is not the ideal choice for everyone. There are many who simply do not want to be bothered with the amount of upkeep and added responsibility that is involved in owning a home. Others will continue to rent while they save up a substantial down payment toward a home purchase. Still others simply feel that buying a home is not an option because they cannot afford it. There are a number of things that can be done to clarify whether or not ownership is for you.
It is always a good idea to look at pricing for the area in which you live. Talk to a real estate agent and see what the average price is for a home or apartment that would fit your criteria. Many people find that the amount they are paying in rent exceeds what a mortgage payment would be. For the same amount of money, or even a lessor amount, a person could be paying on a property that they are going to own. Property that most always appreciates in value, making their initial investment grow into profit at a later date.
Whether or not home ownership can be of benefit to you is decided by the affect it will have on your life. The positive elements of ownership is the ability to establish home equity. Tax exclusions apply as mortgage interest is deductible. If your interest rate in owning a home is fixed, you are sure of the amount your payment will be each month, unlike a landlord who can raise your monthly rent. Ownership provides stability for your family and there is involvement in community activities.
Home ownership involves negatives as well as positives. Some of the cons are the cost of maintaining a home. You may need a new roof or furnace, or simply a coat of paint to keep your home in good repair. A home can also tie up quite a bit of cash flow if it should become necessary for you to move. The process of selling a home takes time. Although property is seen to be a solid investment, in times of recession the value of a home can drop. Regardless of this, you are obligated to a fixed payment that can create a number of problems if your financial situation changes and you can only afford something cheaper.
The process of building equity is similar to a savings plan. Assuming that your real estate will increase in value, you could sell your home for a considerably larger amount then you purchased it for. When a mortgage is new, most of the payment goes to the bank in interest. As time passes the amount to the lending institution falls, with more money being applied to the loans principal. The value of your home versus what you owe on it, equals your equity. If per chance your home appreciates in value, the equity can increase a rapid rate.
Along with mortgage interest on your home, any taxes that you pay are also deductible on your taxes each year. This can mean a rather large tax savings especially when you first purchase your home. Figuring all of these savings in to the final figures may result in a smaller payment being made to own versus renting.
For others who have jobs that are constantly keeping them on the move due to the job type, or transfers, owning may be a choice an individual does not feel justified in making. There are many single working people who enjoy the freedom to come and go as they please without the worry of buying, maintaining, and selling a home. There is no right or wrong to renting or owning. It is simply a matter of which option suits an individuals needs.
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