A lot has been written on buying vs. renting. An Internet search will return millions of pages with opinions and stats supporting both. 15 years ago it was a stronger argument to rent, but recently with home prices rising by as much as 20% in a single year, critics favor buying.
And as exciting as the idea is of owning a home and having the value go up, we want to be smart about it and be aware of some things that come with owning a home.
Pro-renters argue that if something breaks or needs to be replaced and you own the home, then you would need to fix it, but when renting you would just call the owner to fix it. And this is true. A roof might leak, a pipe brakes, a toilet needs to be replaced, pests like mice or termites need to be eliminated, or needing to paint the home are all things you’ll want to budget for.
Pro-owners point out that a mortgage payment can be fixed and paid off, while rent can go up every year, and can never be paid off. Also, renters can get notice to have to vacate the property with only 60 days to get out, not owners. And as property values increase, that equity can be pulled out of the home or paid out when owners sell.
So yes, there will be more costs and tasks with owning a home, but if you do, the reward can be freedom, assurance of livelihood and a nice appreciation of home value.
One note, it’s a good idea to plan to own for 3 years or more. It is amazing to see 20% gains in a single year, but a 5% average gain is the more normal annual gain. Just don’t expect to buy today and have a 40% increase in two years.
Lastly, it’s no secret that most well-to-do people own their primary home. Did Steve Jobs rent? Does Oprah Winfrey rent her home? How about Kim Kardasian? And you don’t need to be rich or famous to own a home; common, everyday homeowners point to their home as a base of their wealth and piece of mind. Even owning a portion of your own home could fix your monthly payment and start earning equity – and by being able to find other like-minded buyers, we hope to help make this possible now.
