What’s the Difference between Owning and Renting a Home?
Today’s definition of the American Dream stands mostly on owning a home. Society takes homeownership as a form of the attainment of the American Dream. Owning a home today symbolizes financial independence, success, and the ability to make changes without hearing anything from a landlord.
With 64.4 percent of people owning homes as of February 2020, it’s easy to say that more Americans prefer homeownership over renting, which is at 36.6 percent. But basing a decision on your living quarters shouldn’t be based on what statistics show about what people prefer.
Deciding whether renting or owning is better for you should be the basis of your decision. You’ll be living in your choice, after all. To help you decide, let’s get on with comparing homeownership and renting.
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What comes with owning a home?
We’ve said before that homeownership is one of the greatest manifestations of the American Dream. It brings intangible and important benefits to living a fulfilled life, such as stability, belonging, and ownership. But is owning a home for everyone? ;
The obvious answer to that would be no. Plenty of people can’t stay in the same place due to various reasons. They can be moving from one place to another for work, family, or leisure.
Owning a home for selling value
If you’re leaning more towards owning a home because you rely on it to be sold at a higher price than when you bought it, you’re hanging on a weak rope. The condition of the housing market is so volatile to the point that even when the market is on an uptrend, you won’t be able to make much off of selling because of transaction costs. Residential construction booms can also depreciate the value of your home. The once ideal location that your property is in can lose its appeal.
The cost of owning a home is higher than renting. Why? When you own your place, you have to pay for all the repair and maintenance costs. There’s also mortgage interest to think about when it comes to homeownership. It’s completely normal, especially if you really want your own home. Just be sure to secure the best deals by reaching out to a reputable mortgage company.
Your own needs
If you’re looking for a home because you’re ready to settle and you’re sure that you’ll be living in the same place for a very long time, then owning that place is your best bet. You don’t want to pay for rent for the next 20 years that you’ll be living there.
Homeownership also benefits people who like to modify and renovate their spaces. If you’re renting, you won’t be able to make changes without negotiating with a landlord.
What should you expect when you rent a home?
Renting provides the freedom of mobility that homeownership can’t provide. But the downside of mobility is that you can be forced to leave when the landlord decides to stop leasing the property. Landlords can also increase the rent and give you problems with monthly payments.
Renting a home is not wasting money on paying monthly rent. You need that place to live, and you have to pay for it. That isn’t throwing money away. While it’s a fact that you’re not building any value with monthly rent payments, but there also isn’t much to owning a home and paying for it monthly.
Is it expensive?
At least with renting, you know what to expect with monthly rent budgets. You pay a specific amount bound by a lease contract until it expires, and you’re not responsible for paying for repair and maintenance work.
The high-value worry you face when renting is rent increases prompted by renewals. If you live in good locations, increases can be steep to the point that you’ll be forced to move.
Should you rent?
Over half of renters are single people living by themselves. This means that they’re not ready to settle in that place and are only there for work or study. If you check those boxes, you’re probably better off renting.
If you’re also one to travel a lot and stay in other places, you don’t want to waste monthly payments on a house.
Which one is better?
The better choice falls on what you need. If you’re ready for the responsibility that comes with homeownership, give it a go. But if you’re only doing it for the sake of praise and a sense of stability that can turn into debt, you’re much better off renting.