In the US, owning a home is a source of pride and a goal that many Americans work toward. It’s a place you can call your own!
But that doesn’t mean homeownership is the best choice for everyone. Before you decide to buy, let’s talk about the pros and cons of buying a home:
Pros of buying a house
It’s a good investment
If you do your research and choose a home in the right neighborhood for a fair price, a home’s worth will grow over time. That goes for the land, as well. This is why people like to buy in an up-and-coming neighborhood, so they can buy cheap and watch the value grow as the neighborhood becomes more popular. A home would be considered a long-term investment, as a mortgage takes decades to pay off.
Your payments go towards ownership
Paying your rent month after month doesn’t get you anywhere. Meanwhile, each mortgage payment is progress in calling the home your own - (since the bank technically owns it until you do).
The interest you pay on your mortgage is tax deductible! If you take out a home equity loan for home improvements, that could also be written off on your taxes. Other deductions include property taxes, home office, and home improvements made for medical reasons.
A home mortgage that is paid timely is a type of good debt that banks want to see when you take out a loan. This adds points to your credit and will help you out when you need an auto or business loan.
Even when you haven’t paid off your entire mortgage, you still have the freedom to make changes to the home. Installing a deck, upgrading the kitchen, expanding rooms — if it’s up to code, you can do whatever you want! In some rentals, you’re not even allowed to paint the walls.
Cons of buying a house
Expensive up-front costs
An appraisal, down payment and other fees are going to be significantly more expensive than your first and last month of rent. You also don’t have to worry about any Homeowner Association (HOA) fees as a renter.
It could depreciate
We mentioned earlier that a home is a good investment, which it is, but the market is not always moving in an upward direction. There are times when things go bad, like the 2008 recession when many people lost their homes. However, in the long run, the market will bounce back.
You’re in charge of all maintenance
There’s no landlord to call if the washing machine breaks or when the roof is ready to be replaced. You are responsible for learning how to fix it yourself or paying someone to do it for you. In a home that has a lot of problems, this can certainly add up.
It’s harder to move
If you want the freedom to pack up and leave to a new city for a new job, then home ownership probably is not the best idea. The process of selling a home is much longer (and stressful!) than moving out of a rental.