Renting vs. homeownership, the following are the fundamentals. With homeownership, there is a requirement that the owner is solely responsible for the maintenance and repairs of the home. However, when renting the landlord handles all maintenance and repairs. Both of these statements are true so let’s take a closer look at who has the real advantage. According to the U.S Census Bureau in an article published January 21, 2020, the median mortgage payment per month is just over $1,500. This might seem like a high price to pay but believe it or not, average mortgage payments are almost equal to the cost of renting. In an article published on the communityrentals.ucsc.edu website, it is reported that the cost of renting a three-bedroom apartment/condo falls within a range of $3,276-$3520 per month. If you look at the two in comparison to each other paying $1500 per month for a mortgage doesn’t seem that bad after all.
Let’s now look at rent payment over time. A person paying $1,100 per month in rent after one year will have paid to a landlord $13,200, after 5 years $66,000 and after 10 years $132,000. These payments work to the benefit of the landlord because the landlord builds equity, pays the mortgage on the property, and gets all of the tax benefits while the renter gets nothing. When you own or are buying a home you get the benefit of tax write-offs, you can also leverage your home to obtain capital if needed. Be advised that homeownership does have its disadvantages, mainly repairs. It is proactive to continually set aside monies for repairs that will be needed. I contend that homeownership is a prudent course of action as opposed to renting.
My family has resided in our present home since 1996. Every year we have made improvements to our home. Being that we look at our home as an investment we make it a point to set aside money every month if repairs are needed. We realize that one of the major responsibilities of homeownership is maintenance. It should also be noted that homeownership is one of the pillars of wealth building. One of the things I recognized early in life was that apartments need to be maintained otherwise they will go downhill. I lived in an apartment for several years with one goal in mind and that was to eventually purchase a home. My first purchase was a condo and I was elated because it belonged to me.
The aforementioned examples stated in this article related to the financial aspects of homeownership vs. renting makes it quite apparent that homeownership is an investment in your future. I encourage those that rent to change their focus and consider becoming homeowners. It is imperative that you understand that taking care of your investment requires setting aside monies for repairs.
First and foremost please know that ongoing repairs are a part of homeownership. Homeownership is the main pillar of wealth. It will more than likely be the greatest financial investment you will make during your lifetime. I know that with planning, financial responsibility, patience, and perseverance homeownership can be obtained. Homeownership is stable, mortgage rates are usually fixed, and you don’t have to worry about inflation. Take a chance. Purchase a home that you can afford. Live within your means. Get to know the joy of having a home that you can call your own. As we speak mortgage financing rates are at an all-time low. Go for it! Please give us a thumbs up, alike, a share, and subscribe. We need your support. Thanks!
Marvin Dixon/Founder
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