Owning your own home is part of the American Dream. There’s just nothing like having the privacy, refuge, and permanency of a place that’s truly your own. While buying a home is one of the biggest purchases you’ll make in your lifetime, it’s also one of the most sound investments you’ll ever make.
Still, choosing between buying or renting a home is a big decision. And if you’re on the fence, you’re not alone. Keep reading to find out the best reasons for buying a home, and when renting is a better option.
Benefits of Buying
For many, owning a home can create an emotional connection and a sense of stability that renting simply can’t offer. But there are also plenty of practical reasons — many of them financial — why buying may be the better option.
Your home is yours.
If you’ve rented in the past, you know that those four walls and roof are little more than a temporary dwelling that someone else owns. That means you’re saddled with design restrictions and limited in your options for home improvement or personal expression.
But when you own your home, you’re free to do what you want with the property to make it a home that reflects your sense of personal style and comfort. Indulge your kid with a lime-green bedroom wall, add solar panels to your roof, or turn your bathroom into a spa-like retreat. Owning your home means you get to put your personal stamp on it without needing to ask a property manager for permission. As an added bonus, some home improvements may even increase the value of your property, should you ever decide to sell.
Rents continue to increase.
As a tech hub and mecca of live music, natural beauty, and laid-back living, Austin consistently tops the list of most desirable US cities — and that popularity is reflected in our continually rising rent prices. Those rising costs mean that you’re paying a landlord more money every year, and that doesn’t even come with a guarantee that you’ll be able to keep your home past your annual contract renewal date.
When you buy a home with a fixed-rate mortgage, however, you don’t have to worry about your budget changing over time or your landlord kicking you out. You’ll pay the same amount, month over month, year over year in principal and interest. Home ownership is simply a better long-term investment because it means you’re building equity. Best of all, unlike renting a home, you actually have something to show for it once the mortgage is paid off.
Interest rates are extremely low right now.
Despite the global COVID-19 pandemic, the Austin housing market not only weathered the storm but has stayed strong throughout it. The increase for local housing pushed inventory levels to nearly zero, creating an unprecedented time for the regional real estate market. Housing experts predict the same for 2021, urging buyers to take advantage of record-low mortgage interest rates, which are predicted to continue throughout 2021. After all, locking in a low mortgage rate now could save you hundreds of dollars each month for decades to come. And many current rental rates in Austin are higher than a monthly mortgage payment.
It’s a method of forced savings.
Owning is simply the more financially savvy move, because your monthly mortgage payments are money well spent. A percentage of each mortgage payment goes toward principal, which can be considered your savings. You’re investing in your own property for a lifetime home, or putting that money into an asset you can sell in the future.
Buying a home can even help you retire early if you can pay off your mortgage in a timely manner. And if you do decide to sell, there’s a high chance that you’ll end up with a payoff, even after subtracting the costs of home ownership.
Benefits of Renting
Of course, while buying has its many advantages, it may not be a feasible option for some — especially during or after the economic hardship of the pandemic. If this applies to you, fear not, because there are plenty of benefits of renting a home, too.
You don’t have to pay real estate taxes.
This is one of the prime reasons why so many choose to rent instead of buying a home. Real estate property taxes can be quite a burden for homeowners, and this is especially the case for larger homes and bigger lots. In fact, it’s not uncommon for property taxes to add up to thousands of dollars annually. Just imagine how far that could go toward your monthly rent!
You won’t have to come up with a down payment.
If you want to purchase a home with a mortgage, you’ll need to be prepared to dish out a hefty down payment — often around 20% of the home’s property value. On the flip side, as a renter you only have to pay a security deposit typically equal to one month’s rent. Best of all, that deposit is returned to you when you move out, as long as you haven’t damaged your space in any way.
You have flexibility in where you live.
When you’re looking to buy a home, you’re limited to living in the areas where you can actually afford to buy. Of course, renting gives you the option to live in places you might not be able to afford otherwise — the center of downtown or in a quaint historic neighborhood, for example.
You aren’t responsible for repair or maintenance costs.
Owning a home means you’ve signed up for more responsibility. This includes renovation costs, maintenance, and home repair, should a roof begin to leak or the HVAC unit experience trouble, for example. Some major issues can cost thousands of dollars. On the other hand, renters don’t have that responsibility since a landlord or property manager takes care of all the repair, replacement, and maintenance to keep everything in working order.
Paradisa Homes is passionate about creating beautiful, functional homes that last a lifetime. Take a look through our move-in ready inventory or contact us today to learn more about upcoming opportunities in the neighborhood of your choice. Our friendly team is committed to getting you set up with a home space that perfectly suits you and your family.