With the American real estate market beginning to show signs of ascending from the ashes of the spectacular crash it suffered seven years ago, and as the economy finally begins to supply the employment that will give this recovery the legs it needs to sustain itself over the long term, you might be pondering entering the game yourself.
You have begun to tire of having a landlord, and as such, you have begun to mull over the benefits of buying instead of renting. Here are some excellent reasons to kiss your former feudal lord goodbye…
1) Decorate and modify your space without begging the landlord for permission
When you own your home, you have free rein over how you wish to decorate it. Some landlords won’t even let you nail pictures up on the walls … how lame is that? When you own the place, not only can you put up photos of your family or your favorite vacation spot, you can knock out the wall altogether (just make sure it isn’t a load-bearing one first) if you want an open plan design in the common areas of the house. Trying doing that with a rental!
2) You can make money off your home legally by renting parts of it out
Mortgage payments can be pricey in some parts of the country, but then again, so can rent as well (hello, New York City!). In the case of the former though, property owners can legally let out rooms, basements, driveway/garage/parking lot space, and even portions of their yard to community gardeners to help offset their financial burden.
Renters often can not do this legally, as they often play a cat and mouse game with their landlord when it comes to subletters that renters take on without their owner’s knowledge.
3) You can’t be uprooted from your home on short notice by your landlord
If you have rented before, there’s a good chance this has happened to you. You get settled into a sweet pad, you had just signed on for another year a few months before, then … POW! A letter shows up under your door informing you that your landlord has sold the property to a third party that intends to take possession of it for themselves, leaving you 30 days (or less) to vacate.
When you own your own home, it’s yours in perpetuity, so long as you keep making mortgage and property tax payments. If you are a responsible citizen, owning confers peace of mind that renting can never give you.
4) Fixed rate mortgages lock in your monthly payment … whereas rent rises nearly every year
Interest rates have hovered around 1% or lower for more than a half decade, a legacy of the painful days of the housing downturn of 2008. These rates won’t be around forever though, as real estate markets across the country and the economy in general have been heating up.
When you make a significant down payment (usually at least 20%) on a property, you are eligible for fixed rate long term mortgages. What this means is that you can make super low monthly payments at rates as low as 4% through the life of your home loan – even as inflation rears its head in the decades ahead to make up for the years of price stagnation/deflation that we have been living through lately.
When you rent, your payment goes up almost every year, most landlords are in the business of making money. Getting in the property market shields your wealth from being eroded by the continually increasing cost of keeping a roof over your head when you rent from a landlord.