Having trouble deciding if you want to rent or buy your home? We discuss the pros and cons of buying a house for fruitful investment decisions.
There are some investments where you don’t have to think much. Why? Because they don’t require much high financials. But when it comes to living the American dream of having a home with your name on it, let’s just say it’s not that straightforward.
Buying a house in the United States means you’ve decided to elevate your social status and achieve full ownership of your dream property. But like we said, you can’t just walk up to a property you like, knock on the door, and say “I want to buy this property, here’s the money.”
We have multiple factors to think about before deciding if the property is right for you or not.
If you’re here to know the pros and cons of buying a house, you’re not going to leave with a sad face. When you reach the end of this blog, you’ll know what will be a smart investment toward buying your next real estate.
Without keeping you waiting, let’s make your home-buying decision easier.
When talking about the pros and cons of buying a house, we'll start by discussing the positives of owning a property in the United States.
Before you non-financial folks start wondering, “What's home equity?” we’re way ahead of you. Home equity, in the simplest of terms, is the difference between your home’s current market value and the money you owe on your mortgage.
The formula of equity
Assets – Liabilities
Still don’t fully understand? Here's an example to clear up your confusion. Suppose you are buying a house worth $200,000 with a 20% down payment. Using the formula of equity (assets – liability), you have $40,000 worth of equity. This means you have $160,000 still owed.
As you continue to pay off your mortgage and that gap between assets and liability decreases, your home equity will keep increasing.
Greater home equity can increase your borrowing power, ensuring favorable interest rates and longer repayment periods.
In addition, increasing your home equity may also decrease your mortgage payments.
Everyone has their own aesthetic sense and surroundings that appeal to them. But when you talk about the pros and cons of buying a house, it’s a massive benefit that you can personalize your home décor according to your desires.
Buying a house means having the freedom to customize the space that reflects your personality.
You don’t have to think twice before repainting your walls, renovating your kitchen, or installing artificial grass on your front lawn.
Imagine, you’ve just come home after a long tiring day at work. You enter your house and immediately that amazingly pleasant vibe makes you feel good. That’s the experience you can experience after buying a house.
On the flip side, if you are renting a home and don’t have full property ownership, you’ll always need approval from your landlord before making any changes. Not the most favorable situation you want to experience.
If you put your historian cap on, the trend tells you that real estate prices are mostly on the rise. You know what that means, right? Prices may spike up anytime after you've rented a property.
You’ll have an eye on your landlord as they have the power to increase your rent, renew the lease, or even sell off the property to someone else. That won't be what you'd be thinking when you were renting the house, right?
You can avoid these complications and uncertainties when buying a house. From having a fixed-rate mortgage to being the sole decision maker for selling or leasing, having your own property ensures you’re not affected by changes in the economy and trends.
It's a common saying, “Death and Taxes are the only two constants in life.”
We don’t know when and where you’ll die (probably for the better), but we can tell you something about your taxes. As a homeowner, you can have several taxes deducted to save a lot of dollars.
The tax benefits which you can expect, include
Wouldn’t it be great if you can get easier access to loans, favorable interest rates, and lower insurance premiums? Well, that’s what you can do when buying your home. Owning real estate boosts your credit score, which usually appeals to the right individuals.
Here are some of the advantages you can unlock when you have a high credit score.
In addition to these advantages, having a good credit score can also impress your potential future and land you a job.
Explore: Check out a Property For Sale Near You
We’re halfway to completing our quest and helping you understand the pros and cons of buying a house. As we’ve discussed the positives, now let’s look at the other side of the coin – some potential drawbacks to owning your property.
Imagine, you have to pay $200,000 for something. You have two options to pay by:
You’d most likely prefer option number 2 (as will most of us), right? Well, that would mean you won’t have 100% ownership of whatever you’re buying.
When you are buying a house, you need to pay a significant upfront amount, which includes down payments, deal closing costs, and other expenses as well.
You need to be calculated and ensure making the upfront payment won’t financially overextend you.
"Owning a home is not just a roof over your head, it's a lifetime investment and a symbol of your success." Sonny Kalsi, a real estate professional.
When you buy your home, it’s your baby, that you need to protect from deterioration and harm. That means bearing all expenses of repair, maintenance, and other activities to make your investment worthwhile.
We’ve mentioned while discussing the pros of buying a house that “you can’t personalize the property when renting a home.” But an upside of that situation is that your landlord takes care of all maintenance work and its expenses.
So, if you’re willing to pay extra $$$ to get that personalized feeling when entering your home, buying a house is the right option for you.
Buying a house means deciding to spend years in the same property after all the time, effort, and finances it has taken to acquire the home. It might be difficult to change your home and move to a new location in the near future.
Another possible disadvantage of owning a home is the debt you’re burdened with in the form of a mortgage. If you’re unable to fulfill your commitment to paying your mortgage on time, you may end up losing your home.
Remember, investing in your house might mean you’ll spend many years in the same house. If you’re up for that long ride, start looking for a reliable realtor to buy a house.
This can be one of the pros and cons of buying a house at the same time. We’ve already mentioned above in the pros of buying a house that real estate properties usually appreciate. But is that a certainty? No, it’s not.
There’s always the risk of an uncertain occurrence triggering a decrease in the property value. If that happens, your plan to sell the property at a higher price than what you’ve bought goes out the window. That may affect your ability to sell the property at a good price.
In our final point in this series of pros and cons of buying a house, we talk about the potential external interferences in the form of associations. The homeowner association (HOA) is an organization to set and enforces rules for property residents.
If you’re buying a property within the HOA jurisdiction, there’s a good chance that you may go, “Wait a minute. It’s my property. Why are these people dictating what I can and can’t do?”
Or, if you see the glass half full, you might, “Oh well, at least we have these people to keep the neighborhood clean and maintain order.”
If you have the latter attitude, buying a house, even in the HOA jurisdiction won’t bother you much.
Explore: Get The Estimated Property Value
Close your eyes for a moment. Now imagine walking up to an amazing sunrise, with birds chirping around you, and (to cap it all) your home having the vibes you want. That’s the experience you get when living in your own home.
Now that you know the pros and cons of buying a house, you now know what you have to do to achieve this experience.
All that’s left now is finding a trustable realtor to find your dream home and help you uplift your social status.
How about starting with a few clicks and contacting a reliable realtor – HAR? We assist you in speeding up your search to find the home that meets your expectations and specifications.
Home equity is the difference between your home's current market value and the money you owe on your mortgage. It represents the portion of the home that you truly own.
Homeowners can benefit from tax deductions related to mortgage interest, property taxes, and renovation and repair expenses. These deductions can help reduce taxable income and save money.
Owning a home can positively impact your credit score. A high credit score can lead to easier access to loans, favorable interest rates, lower insurance premiums, and potential employment opportunities.
A potential drawback of owning a home is the high upfront cost, which includes down payments, closing costs, and other expenses. This upfront financial commitment can be substantial and requires careful financial planning
When you own a home, you are responsible for the maintenance and repair costs. In contrast, when renting, the landlord typically takes care of maintenance work and expenses.
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