The Advantages of Owning a Home Versus Renting a Home

A pleasant home environment is the foundation of a happy life. After all, it is the place where you spend more time than any other. Its impact on your finances is also significant. When considering home ownership, one of the big dilemmas revolves around renting versus buying. 

Renting does offer some advantages, such as the fact you are not tied down beyond the length of the tenancy agreement or that you are not responsible for structural repairs. In reality, though, buying a property (or ideally owning a new home) brings a plethora of rewards that easily outweigh the benefits of renting. Here are some of the greatest benefits of owning a home.

Building Long-Term Financial Equity

It’s one of the oldest cliches in the book, but why pay someone else’s mortgage off when you could pay your own?

The nationwide homeownership rate currently stands at 66%, while a large percentage of renters would buy a home if they could. This ratio of renting versus buying should instantly highlight the fact that the latter offers many advantages. From a financial perspective, the chance to build long-term financial equity is a huge incentive for purchasing a property. 

Properties are one of the best assets that anyone could own. While the current economic climate has seen the rate of appreciation slow in the past two to three years, houses continue to rise in value and have been shown to protect owners against inflation for decades.

Average house prices more than doubled from $24,000 in 1970 to $55,000 by 1980, while in today’s market, it’s common to see many homes over $412,000. Frankly, matching that level of capital growth in other investments is very difficult, to say the least - even before accounting for the fact that not owning a home means you’ll keep losing money on renting. 

The earlier you buy a home, the more you stand to gain from its appreciating value. Unfortunately, if you continue to rent, your landlord will reap the rewards. Your monthly rental payments cover their mortgage, and they also see the value of their assets rise.

Conversely, by owning a new home yourself, you can gain all the potential benefits of building long-term financial equity. Better still, it can give you the financial flexibility to re-mortgage at a later date or utilize your equity when eventually selling the home (if you do) to buy another. 

Living More Cost Efficiently Once Your Loan Is Repaid

As well as actively increasing your overall wealth through buying an asset that appreciates, home ownership can help you live a more cost-efficient life. In the short-term future, the stability of living in one home means you avoid the costs associated with moving properties, which can cost thousands of dollars. However, the long-term rewards are even greater.

Each monthly repayment paid against your mortgage or home loan is another step towards a situation where the home will be paid off. Once it is, you will no longer need to make monthly payments, meaning your living costs will be limited to things like food, utilities, and travel. Renters must continue to make monthly payments for the rest of their lives. 

While this might not feel too problematic right now, it can certainly have an impact on your retirement. Many renters will find that they will need to keep working, as pensions and 401(k) payments might not cover their living costs.

If you purchase a property or build on a lot, though, it’s likely that you’ll own the property outright before retirement. This gives you time to save money for your golden years. The money you no longer spend once your mortgage is paid can be used to fund vacations or other exciting endeavors.

More Customization Options Available

When you rent a property, it is still possible to make the place feel homey. However, there will be a number of restrictions in place, particularly if you have a difficult landlord. Even if your landlord allows you to do more than others might, you will need to seek permission when painting or changing interior designs. Any external changes to the yard must be approved first, or you could be liable for the cost of reversing your changes.  

Homeownership gives you far greater control over the interior and exterior design. When owning a new home, you will even have the chance to ensure the dimensions of your rooms are built to your specifications. While you can certainly take inspiration from other luxury builds, the fact that you can truly impress your vision and personality onto the home can be a wonderful and rewarding feeling.

Owning instead of renting means you have long-term stability, so you can take your time to ensure that luxury projects are completed to your taste. If you decide to update rooms at a later date to reflect evolving trends, you’ll be perfectly positioned to do so.

If you want to make the home of your dreams a reality, home ownership is the solution.

Passing Your Home Down Through Generations

Buying doesn’t just benefit your life; it can continue to support your family even after you’re gone. Passing your property on to your children may enable them to continue living in the family home they grew up in. Alternatively, if they sell it, the funds generated can enhance the amount of their inheritance.

With the right life insurance, this financial protection for your children can exist even if you die before the home loan is fully repaid. For most people, home ownership means having a foundation upon which they can build a better life. Many homeowners also have peace of mind from knowing that their loved ones will be left with a highly valuable asset in the future.

While owning any home has many advantages over renting, owning a new home allows you to experience every possible reward. To learn more about designing your luxury build today, contact Guardian Homes today.