One of the biggest decisions that you will make in life is whether or not to buy your own home. Like most things in life, there are both advantages and disadvantages to owning a home. The decision is made even more difficult with today’s unsteady housing market. Everyone has heard the horror stories of how the bottom dropped out of the housing market and people were left with a debt greater than the resale value of their home. Conversely, we have also heard the stories of housing investments that have created a huge net profit for home owners.
A good way to make this very important decision is to take a thorough look at the pros and cons of owning a house. The more information you can gather on the subject the better. Talk to banks and mortgage brokers as well as real estate agents and builders. Check out what is available on the market by looking at sites like Coral Homes to get a sense of the type of property you would like to own.
Buying a house is an emotional issue as well as a financial one, so it’s a good idea to try and break the decision down logically by clearing establishing the pros and cons of owning a home.
We have all heard the saying that paying rent is dead money; despite all your rental payments over many years you still don’t own anything. Although you may be in debt for many years when you buy a house, at the end of the day you will own it and every payment you make increases your percentage of ownership. This is called equity and the banks will allow you to borrow against the equity you have in your home.
Rental properties often have very strict guidelines around what you can do in the home; you may not be allowed to own a dog or to hang anything on the walls. In your own home you can do what you like. If you don’t like the colour of the kitchen you have the freedom to paint it.
If you are buying a home as a rental property you have the advantage of being able to use your mortgage interest and maintenance costs as a tax deduction. You also have the advantage of having someone else help pay for your home. Whether you rent or live in the home you buy, buying your own home often represents a good investment.
Perhaps the biggest advantage of owning your own home is simply the pride of ownership.
You will need a significant deposit to buy a home, which means you will be tying up funds that you could have invested elsewhere, like the stock market. Buying a house also involves a commitment so if your job is insecure or if you might wish to relocate, buying may lock you into something that is not in your best interests. You will also be responsible for all maintenance costs.
Disclosure: This featured post is brought to you by Coral Homes. Please see my PR and Disclosure Page for more details.