The first thing that often comes to your mind when the debate between owning a home and renting one comes up is the bragging rights, the ability to say, "I own my home outright." The ego-boosting proclamation is one perk of owning a home over renting one. However, here, we discuss some practical and financial reasons owning a home is a better option than renting a home.
1. Ownership is Like Investing
Think about these two scenarios. First, you decided to rent an apartment and paid over an extended period of time. At the end of your rental period, you have to leave your landlord's house. On the flip side, you have used a mortgage to buy a home and have an agreement to pay a specific amount of money monthly over a specified period. At the end of the period, if you have satisfied all the requirements of the contract and paid all the money, you are a homeowner outright. There you have it! Taking a mortgage for ownership is like a long-term investment that is sure to produce the desired results.
2. Growing Equity
The mortgage you pay on your home monthly helps you build equity on your home. The equity on your home significantly builds up your credit score and allows you to enjoy numerous other financial benefits, including borrowing against your home's equity. When you pay rent, it is registered as an expense on your credit score, and the money goes straight to your landlord. You gain no financial benefits from rent.
3. Earn by Rent
As the owner of your home, you have the autonomy to decide to rent out an extra room or your basement to make more money for yourself. This is also one of the perks of owning a home.
4. Freedom to Renovate
Another benefit of owning a home over renting one is the total freedom to revitalize any space in or around the structure and make it into whatever you choose it to be. You might decide to change the colors, change the floor, redo the garage, remake the walkway, own a garden, or do whatever you wish in your home. As a tenant, you do not have this kind of liberty. You need to seek permission from your landlord to make any permanent or even temporary changes to the house you rented.
5. Tax Relief
In the United States, your mortgage interests and your property taxes are deductible. So, if you have a mortgage, you will get tax breaks. You can also work from home and write off office space to earn more tax deductions.
If you are renting an apartment or a home, your rent could also be subject to increments at about a month's notice. But home buying is a much more stable option. You are obliged to pay only the agreed amount even if you are using a mortgage.
Don't get me wrong, renting an apartment also has its perks. But then, you cannot go wrong with committing to buying a home, considering the rate with which homes are appreciating.