For many generations, the dream of home ownership was the culmination of long years of hard work. If you owned a home, then you made it. Changing economic circumstances have altered that perception.
Yet owning a home can still be a rewarding experience. Here are some of the pros and cons to think about.
List of the Pros of Home Ownership
1. You have access to greater privacy.
Owning a home means you don’t have a landlord coming around to inspect the property every so often. You’re not kept to certain standards of conduct either. You have much more privacy when you own instead of rent.
2. Costs are predictable.
You know how much your mortgage is going to be every month. You have a general idea of how much you’ll be paying in property taxes. There is much less uncertainty when it comes to these costs of living compared to the annual changes that renters typically experience.
3. Some costs may be tax deductible.
In the United States, many homeowners qualify for a tax deduction. The property taxes and interest paid on the mortgage are often deductible if individuals or households qualify for itemized deductions.
4. Houses often increase in value.
The value of a home usually goes up. Even if pricing remains level, home equity provides added value for families. That makes it possible for the home to become an asset over time that can become a needed nest egg.
List of the Cons of Home Ownership
1. It is a long-term commitment.
Owning a home often requires a 2- to 5-year commitment to maximize the financial gains that are possible.
2. Homeowners pay maintenance costs.
The maintenance costs of wear and tear are the responsibility of the homeowner. That means expensive repairs can come up unexpectedly, like replacing a water heater or fixing a broken toilet.
3. It requires a down payment.
Although there are some $0-down mortgages, most require a down payment of at least 5%. Some mortgage providers may require a 20% down payment. There are also closing costs to pay and then moving expenses to handle.
These owning a home pros and cons show that it can be a fun and rewarding experience, but one that must also be responsibly managed. Over time, many homes can become an asset. It is when they are not treated with care that they tend to become a liability instead.