What seems to be a dying stepping stone of the American dream, owning a house is a subject that is still at the forefront of many young adults’ desires.
Whether you are single, married, or have a young family everyone needs a place to lay their head at night. With the rising costs of houses, townhomes, and apartments, there are strong opinions on both sides as to which is the best option.
It can depend on where you live as well because of the density of housing.
For more urban areas it can be exceptionally expensive to buy a home, but renting is a cheaper option.
Sometimes there are plenty of houses available and renting is a more expensive option because of the availability of cheaper housing.
There are plenty of blanket statements that can be made for and against the argument of both renting and buying. The better thing to be focused on is the small details you wouldn’t consider in either situation that can help you ultimately decide the kind of lifestyle that you want.
Pros and Cons of Renting
If you are on the side of renting there is plenty of freedom at the cost of having your money go into someone else’s pocket every month. After a decade or more of renting in most cases, it adds up to the price of a medium-sized home.
That being said you are not responsible for anything except the rent and a few bills, with the added bonus that most lease agreements are month to month after 1 year of renting. There is very little tying you down to an area beside a lease agreement, if you don’t like where you are it is very simple to move elsewhere.
It is also cheaper for the short term because buying a house requires down payments, repair costs, as well as hidden costs like property taxes going up.
You do not need to worry about things needing to be fixed like a water heater going out, appliance replacements, or any other issues. When you do have a problem you report it to your landlord or rental company, and if you are renting from decent people they should cover the cost of anything needing to be replaced or fixed.
The Pros and Cons of Owning
Owning a house is not for everyone.
They require a lot of maintenance and upkeep, and you can’t ignore issues for long before they can get out of hand. It takes years or even decades to get enough money together for a down payment.
Once you own the property all of the issues that existed before now belong to you. If you decide you don’t like the town that you live in moving on is not so simple, even in an aggressive housing market, it takes weeks to months to sell a home.
You will gain a massive nest egg that creates a stable financial future despite all of the burdens. This is why it is often the best thing to purchase as a first-time investment.
You gain equity in a home the moment you own it, and this can open up a lot of options. You can take loans against the equity of your home, or cash-out refinances to invest in other properties.
Although it can be exciting to take $75k out of your equity to do the renovation you always wanted, making these choices seldom will be in your best interest.
The best part about owning your home is the fact that it’s yours to do as you please. You no longer need permission to hang a picture, paint a wall, or replace a dingy old shower with a claw-foot tub. You have your own place to always land, and that is priceless
Timeline…
For argument’s sake, this is the way I would encourage anyone to go about the renting vs owning debate.
Own when you are younger or when you can afford the down payment. This gives you a tremendous advantage for investing and having a financially stable portfolio moving into the later years of your life. It also will provide you with a sense of value for the home you are living in, so that down the road when you do decide to rent you care for a property as if it was your own.
Renting when you get into your later years might seem like a backward idea, but logistically if it is only you this can be a viable option.
Unless you intend to pass property onto your children or another family it makes more sense that you no longer have to maintain a home or fix anything that might break. You get to live in peace and if you have an issue you call the property owner. This might look like assisted living but it may even make sense as young as retirement age.
There are quite a lot of pros and cons to both sides, but really it comes down to the lifestyle that you want to live. Either path you choose will be up to you and where you see yourself anywhere from 5 to 50 years later in life.
The best part is there is no wrong answer all you need to do is jump in.