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Why It’s More Cost Effective to Buy a House Than Rent One

  • October 1, 2020

If you're reading this, I'm earning money. Thanks for helping to feed my family. Please see our disclosure for more information. Also, any advice provided is for informational purposes only. I'm not a CPA, lawyer, or doctor, although my parents wanted me to be all three. So, talk to a professional before acting on anything you read below.

house shopping

Are you house shopping right now?

Buying homes have earned a bad rap in the last years because of the subprime mortgage crisis and economic collapse that left many homeowners unable to pay for mortgages.

Fortunately, the real estate market made a comeback due to rent prices rising and housing prices falling, making the latest house and land packages in the suburbs extremely affordable.

However, if you're still struggling to decide whether to buy or rent, consider these six reasons to dive into homeownership.

It's Cheaper in the Long Run

Although buying a house is more expensive upfront, it will save you more money over time. That's because monthly mortgage payment tends to be lower than monthly rental fees, and when you own a house, your expenses get reduced over time as you pay off your interest and principal. Besides that, each month, you get to invest more into the property while saving on interest, allowing you to save and earn more.

Related to house shopping:

You're Free to Do Whatever You Want to It

When renting a house, then the homeowner is the one who's in ultimate control of everything. You can expect renting to come with a long list of rules and regulations, making the house feel a lot less like a real 'home.' If you want to make changes, you'll have to consult with them first, which can be complicated for many.

That's why if you're looking to personalize a house into your dream home, it's best if you buy the property instead. That's because when you own a home, you're free to do whatever you want with it, from changing the wall colors, refurbishing the flooring, to making extensions, it's all up to you.

It Increases Your Net Worth

Homeownership is more than getting your dream home. It's also a simple and efficient way of building one's net worth. Housing accounts for over 67% of the average person's total wealth. So, unless you're regularly saving and investing through other methods, buying a house is a great way you can save money while building your net worth.

It Forces You to Save

Most homeowners are forced to save because they have to pay for monthly mortgages, leaving them to put cash away instead of wasting it on unnecessary and expensive items or expenditures. Then when you eventually pay off your mortgage and put your house for sale, there's a high probability you'll be walking away with a payoff, allowing you to enjoy your home while ensuring future profits.

It's a Great Investment for the Future

House prices are likely to increase over time, allowing you to secure extra cash you can use later. Additionally, if you're planning on selling the home eventually, take advantage of your ownership and take in a renter for a spare bedroom or rent out your driveway space to commuters. You can monetize your home in many ways, so take advantage of this and enjoy a massive payoff in the future.

It Serves as a Sign of Success

Finally, like with many hardworking individuals, nothing beats buying your own home, giving you a sense of accomplishment and pride. According to surveys, most renters admit that renting can be frustrating and disempowering, making their living situation less than ideal.

Wrap Up: House Shopping This Year

Homeownership is a sign of accomplishment for most individuals, but many families have opted to experience temporary domestic bliss by renting. However, if you want to get the most out of your dream home and enjoy it in the long run, it's best to buy it for a real 'home sweet home' experience.

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