The Advantage of Buying over Renting

January 4, 2018

Even back to the early beginnings of America, it has always been the dream of the citizens to own a piece of their own property and to be able to own the home they live in. Though it is a pretty large commitment to own a home, the long-term benefits far outweigh the benefits of renting. 

Let’s discuss the benefits of buying versus renting.

Forced Savings

When you make the decision to buy a home, you start building equity, which then allows you to use that equity towards other things. Every dollar you spend toward your home gives you ownership toward this piece of property. This allows you to use the equity for other things like adding an addition, paying off debt, or sending a kid to college. When you are renting, those dollars only go toward the landlord and you will never see any benefit back.

Tax Savings 

 When you own a home, there are many tax benefits that can be given. As the government wants people to own homes, they have given them certain tax credits that can be deductible. Some of the items that can be deducted are interest on the mortgage, property taxes and any profits you get from selling a home. You can always talk to a tax professional to see if there are other items that will benefit you in the ownership of a home. Renters get no tax relief.

Monthly cost 

As a homeowner, you have the ability to decide at the beginning what your monthly mortgage will be. This will allow you to make sure it is something you can afford and that won’t go up. As you make more money, this will allow you to focus on other aspects of either your home or other costs that come up. In addition, your home value will most likely continue to rise in the next 15 or 30 years. When renting, you are not in control of when prices go up, even when your salary may not. 

Less Expensive 

Many reports have been done that show the cost of a home over time versus renting will be cheaper. One report on from Trulia shows that it is anywhere from 6% to 57% cheaper to own than rent. Though rent can sometimes be cheaper over the short run, over time it will probably be more expensive. 

Living in your Investment

While you can invest in other things like the stock market, or gold or other things, having an investment where you kids can grow up, you can be close to your work, and if things go wrong you can still have some equity to help you when you need it, owning a home is the best investment. 

It may be a temptation to avoid saving for a home because the initial investment can be steep, the long run will always be worth it as an investment, and also as a place