To own a home or rent a home? I am sure this question has been debated by many millions of potential homeowners.
It is a big decision and both sides of the coin have their advantages and disadvantages. I would like to share some of my opinions with you.
Advantages of Owning A Home
Having your own home is something many people strive for especially for those thinking of starting a family. You get a sense of freedom and security since the house is yours and you are free to do whatever you want with it. You are free to hack and decorate your house to your taste.
An advantage of owning a home is that it can be a great investment tool. Think of it as investing in real estate, only that you live in it as well. The government also has various kinds of tax rebates and deductions for home owners.
The biggest advantage of owning your own home versus renting it is that your monthly payments are not “wasted”. What I mean is that when you own a home, your monthly home loan payment goes towards paying your home. When you rent a home, the monthly payments only help to line the homeowner’s pockets.
Another interesting thing is when you own a home, your credit rating goes up a lot as well, thus you are able to get better loans at a lower interest rate.
Disadvantages of Owning A Home
There are some disadvantages to owning a home. For example, you are liable for any accidents and injuries on your property. Getting a home insurance policy covering such cases can offset this. However, there is a cost involved.
You are also liable for any damage that is caused to your neighbor’s property if the cause comes from you or your property. An example would be a fire breaking out from your home and spreading to your neighbor’s homes damaging their properties. In this instance, you are liable to pay for the damages caused.
Wear and Tear is part and parcel of owning a home. For example, the water pipes may turn rusty, windowpanes may need refurbishing or the garage door is broken. From time to time, you need to spend some money on maintaining your house.
Your home loan needs to be paid on time and so is your home insurance. Therefore, it can take a toll on your financial commitments. So be sure to plan your home loan payments properly.
Though there are various tax rebates and deductibles when owning a home, you still need to pay property tax each year.
As you can see, owning a home requires financial commitments. So be sure to plan ahead before getting one.