If you’re caught in a heavy downpour or planning to spend some serious time beneath the strong sun, an umbrella is a handy thing to have. On the other hand, it can be fairly useless, if not downright dangerous, when there are high winds or lightning bolts in the forecast. In a similar fashion, both buying and renting have their perks and drawbacks. Sometimes, it’s a matter of considering your situation and deciding what suits it best. When is buying a house better than renting?
When Is Buying a House Better Than Renting?
Buying a house has long been touted as part of the American dream. However, there’s no denying that renting has its fans too. Many people weighing the matter of buying versus renting get caught up in the financial angles, but anyone who is seriously wondering if they should purchase a home or stick to renting knows that that’s just one piece of the puzzle. There are many factors to think about when considering your housing goals. When is buying a house better than renting?
You want to build your net worth.
Some people insist that renting is the better deal for those who want to build their portfolios because owning a home ties up resources that you could be investing. However, others suggest that mortgages should be considered a form of forced savings. After all, part of each month’s mortgage payment ultimately helps you to build home equity. While you could access that equity by refinancing or opening a line of credit, it’s more difficult and time-consuming than simply drawing cash out of a savings account, so homeowners are generally less likely to do so on a whim. One thing is clear: Homeowners tend to have a higher net worth than their peers who rent. According to the Federal Reserve’s Changes in U.S. Family Finances from 2016 to 2019: Evidence from the Survey of Consumer Finances, the median net worth for homeowners was $255,000 in 2019. For renters, it was $6,300. That’s quite a difference.
You want to be part of a community.
Do you want to put down roots? If you want to help build a community that you’re happy to be a part of, buying is a better strategy than renting. As CreditDonkey points out, homeowners tend to be more invested in their communities. Studies suggest that they invest more social capital, build stronger ties with their neighbors, and get more engaged in local politics. Being a homeowner also offers stability that is hard to beat and can even provide something that can be passed on as an inheritance to future generations.
You crave privacy.
Renters have to deal with neighbors who are just a thin wall away and invasions from landlords who want to inspect the property. For someone who values peace, quiet, and privacy, that can be difficult to deal with. As Homeia notes, homeowners often have more of a buffer between them and their neighbors, so there’s less need to worry about what your neighbors might overhear as you go about your day. Plus, there’s no landlord, so you don’t have to accommodate demands for either routine or surprise inspections. It’s your space, and you get to decide who you’ll share it with.
You want the freedom to put your own stamp on the space.
Renters have limited options when it comes to making a space theirs, which makes sense because it doesn’t actually belong to them. As Business Insider reports, owning a home gives you a lot more freedom to put your own stamp on a space. If the small, cluttered kitchen is frustrating your inner chef, you’re free to remodel it and create a kitchen where you’ll delight in making delicious meals. Is a grungy bathroom or a dated den in dire need of an update? You’re free to make the changes. As an added bonus, doing so could boost your home’s value.
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