For a first time homebuyer, renting may seem like a better option. After all, renting is cheaper than owning a home, you don’t have to worry about maintenance, and it’s so much easier to stay where you are. Moving is a hassle, and shopping for a new place to live is such a pain! Think again.
Today’s housing market has shifted dramatically towards the buyers’ favor, and in most mid to large cities, renting is actually far more expensive than a monthly mortgage! With that said, we’ve put together a number of reasons why it’s a better time to own a home rather than rent.
Owning Can Be Cheaper
It may seem a little counterintuitive, but owning a home in most real estate markets today is actually cheaper than renting. Plus, according to this Forbes article, rent in many larger cities across the country can cover the mortgage and living expenses of a quarter-million dollar home.
The fact of the matter is that housing is a commodity in the rental industry. Landlords and property managers often pay a mortgage on their rental properties then mark up their rent based on their expenses. By owning, you cut out the markup and the middleman and become your own landlord (without the bland wallpaper and rotting floors).
The Home Owning Learning Curve Isn’t So Steep
One major factor that often deters renters from buying a home is the issue of home maintenance and paying for the inevitable mechanical failures associated with a house. In all likelihood, however, with a bit of mechanical wherewithal and some handy YouTube videos, you can conquer even the most perplexing tasks.
In the end, the learning curve of becoming a homeowner isn’t nearly as steep as some landlords and renters make it out to be. Staying on top of your preventative maintenance for all of your mechanical systems will help alleviate the burden of replacing and repairing things for years.
Asset, Equity, and Opportunity Costs
Perhaps one of the biggest reasons to ditch your landlord in favor of home ownership has always been that owning a home adds a real asset and equity to your portfolio. Of course, those things don’t come without a cost: opportunity cost. What this means, in short, is that you have to give up something to gain something else.
In the case of home ownership, you give up cash, savings, or perhaps investments to make a down payment, pay closing costs, and make some renovations to your new digs. And while that cash could have gone towards a high-yielding mutual fund, the inherent risk increases significantly.
Real estate is a safe investment and is far slower to change in today’s volatile equity-focused financial markets. Stay safe and go with home ownership.
A Mortgage or A Speeding Ticket
A wise old man once said that paying rent is like paying for a speeding ticket, and often times that proves to be the case. Instead of paying your monthly speeding ticket, consider paying a mortgage, owning a piece of property, and having the freedom to make your house a home.
Start by calling Tidewater Mortgage Services today, talk to a mortgage specialist, and get pre-qualified for the financing you need to start owing a home. Tidewater’s staff has over 20 years of experience helping experienced and new homeowners alike get the funds they need to achieve their financial dreams. Call today, and you can get pre-qualified for the house you’ve always wanted!
