Owning a home is at the heart of the American dream. Nearly all of us want to own our home at some point. However, owning a home, while a great long term move, does have some drawbacks to consider. So for today, let me show you the advantages and disadvantages of owning a home.
(1) Advantages of Owning a Home
- Building equity: Home equity is built through time. As you pay down your mortgage and as the property value increases you will build up the amount of the house that you actually own. When you are a renter, you don’t get to do this at all.
- Pride of ownership: When you own a home, you will likely take more pride in it because it is YOURS. Want to play tackle football in your living room while you are a renter? No problem! Want to play tackle football in your living room when you own the home? Eh, probably not. When you own a home, you will have more pride in it than the home you live in when you are a renter.
- Good investment: Homeownership is nearly always a good long-term investment. Yes, the housing market sometimes goes down, but the housing market nearly always goes up. That means that the house that you buy for $200,000 will likely be worth $300,000 ten or fifteen years from now. This is called a “use-asset”. Meaning that it is an asset (the house) that you use (live in).
(2) Disadvantages of Owning a Home
- Lack of mobility: When you are a renter, you can move to another area fairly easily. Yes, you have to call your friends and offer them a slice of crappy pizza and a light beer to help you. But at the end of the day, once your lease is up, you just have to move your stuff to another place. When you own your home it is not that easy. You either have to go through the process of buying a new home and selling your old home or renting out your old home. And that can be quite cumbersome.
- Paying taxes, insurance, and HOA dues: Sure not everyone will have an HOA, but you will ALWAYS have taxes and insurance. Even if you pay your house off completely, stop paying your taxes and insurance and you will see who REALLY owns your home. When you are a renter, these expenses are factored into your rent and you don’t have to worry about them.
- Maintenance and repairs: This is the big one. When you are a renter and the sink breaks, you just call the landlord and they have to deal with fixing it. But when you own the home, YOU have to fix it or hire someone to fix it. And a home will always need maintenance. You will always need to clean out the gutters, divert water away from the house, change the air filters, patch holes in the walls, etc. This stuff can really add up to being a lot of time and headache that you wouldn’t have to deal with if you were a renter.
Final Thoughts
Owning a home is a really great thing for most people. But if you are going to buy a home, make sure to take these advantages and disadvantages of owning a home to heart. Just know what you are getting yourself into and make sure that you will likely stay in that home for the next 5-7 years.
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Here are my other articles on owning a home. 🙂
Until next time!
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