Pros and Cons of Owning Your Own Home
We purchased our first home (a condo) right after we got married. My parents pushed us into it, saying it was a good investment. I guess it has worked out pretty well, but sometimes I think back to that time in my life and think it probably would have been better if we had rented for awhile first. Which has led me to think about the pros and cons of owning your own home. Keep in mind that this is pretty much just my opinion and in the end you have to do what is best for you.
There are many pros to owning your own home, as long as you keep it affordable for you to do so. Don't take out a mortgage that is too large for your income, and let the equity build up in the home rather than take out a home equity loan. This makes owning your own home a financial benefit. You build up a forced savings account - equity that will be yours when you sell the house. When you have a mortgage, a large portion of your payments are interest. You can deduct this interest on your taxes - which for us, means we can itemize each year and get more money back.
When you own your own home, it is yours and you can do whatever you want with it. If you want to paint a room blood red (ceiling and all - yes we owned a house that someone had done this too) then you can. If you want to rip out half the yard and plant a garden you can. If you want to get three dogs, then you can. To me, this is one of the larger benefits. I don't have anyone to answer to about the way I live and take care of my home.
On the flip side, there are drawbacks to everything, right? It costs more money to own a home. Some people might argue with this one. In fact, that is one of the things that led to the mortgage crisis. You could take out a mortgage and have a monthly payment about the same as what you would pay for rent. This led many people to think they could afford to own a home. The thing about owning is that there are many more expenses besides just the mortgage. We have sunk $10,000 into our home over the past three years we have been here and we need to put in double that within the next few years. When the roof needs to be replaced, we have to pay for it. When the furnace breaks, there is no landlord to come in the middle of the night to fix it. We get to pay someone to repair it.
When you own a home, you are also locked into that home. You can't decide you want to move next month and then do it. You can't just give a 30 day notice to the bank and be gone. One thing to consider is how long you will be in an area and if it is an area that you really want to stay in. With the housing market so down right now, it has become very difficult to sell a home. I see houses sitting on the market for a year or more. If you are transferred for work or something, you could have a very hard time selling your home.
I find it more worrisome to own a home. When I rented, I never worried about anything breaking or needing to be replaced. Now, I worry all the time about how much longer the furnace is going to last, or how to save the money to replace the driveway. It is less stressful to rent, for sure.
While I wouldn't trade home ownership for anything, I sure wish I would have thought about the pros and cons 13 years ago when we bought our first place. I really think we would have done things differently, and honestly I think waiting a few years and getting on our feet better before owning a home would have put us in a better place financially. So before you buy (or buy again) think through all the aspects of renting versus owning and decide for yourself which will better meet your needs right now.