Most people would say that owning a home is better than renting, but are they right?
Renting is the most affordable alternative if you desire the flexibility or cannot afford the up-front costs; however, buying a home can be 45% cheaper than renting! Undecided? The following are the disadvantages of renting to help you better weigh your options.
Rules and Regulations –As a renter you are subject to the owner’s rules or rules of the lease agreement, which can impact the freedom to use or renovate the property. Rules may include:
Refraining from making changes to the rented property without the consent of the homeowner
Limitations on home decor - No PERSONALIZATION ALLOWED!
Restrictions on the amount of people on a lease
Smoking and certain habit restrictions
If you choose to buy a home or unit space, the rules are your own. You can customize the look of your unit, renovate rooms to make the home more valuable, have pets and decide who lives there.
Lack of stability –As a renter there is no guarantee that a lease will be renewed on the same terms and conditions when it expires. This may result in an unplanned rent increase or having to vacate the property. Issues may include:
Your family is living in a rented house on a temporary basis. Any infraction allows a landlord to remove you with a 30-day notice.
The owner can remove you if he/she wants to sell the property.
As inflation pushes up the cost of living, your rent goes up as well
Homeowners are permanent residents and their families will not be forced to leave unless their mortgage defaults. Fixed rate mortgages also offer stability to homeowners who cannot afford purchasing a home up front. Fixed rate mortgages are comprised of consistent monthly payments, regardless of the economy or your paycheck. You’ll have a stable family environment knowing that you won’t have to move unless you want to.
No Equity –Renters don’t get any equity gains in the property they’re renting.
Your rent money goes to paying someone else’s mortgage.
Any changes you make toward the house increases the value of the landlord’s property.
If new shops open near your apartment, the property value will increase as well as the rent price.
You have no control over annual rental fluctuations which are directly affected by inflation.
Homeownership is an equitable long-term investment. When you’re a homeowner, every house payment you make typically builds up more equity in your home.
No Financial Incentives –Of all of the disadvantages of renting, this is the most painful part because there is zero return on your investment for rent payments.
No incentive to improve or decorate the property from a financial perspective AS ANY GAINS go straight to the landlord, not you.
Real beneficiary is the landlord who earns an income and has his or her debt paid off by you.
Monthly rent payments consist of money that is not being invested in long-term security nor is it building up savings.
You won’t be able to claim any deduction for mortgage interest and property taxes when you file your tax returns.
In home ownership, paying off your mortgage is like contributing to a compulsory savings plan. As your loan balance goes down, your equity in your home goes up thereby increasing your personal asset base.
Other perks of home ownership include the inclusion of profits from capital gains and energy-saving rebates or tax incentives from companies or your state government if you install green appliances.
Call me today to find out how YOU,yes YOU, CAN become a home OWNER! Jessica Leopard - Realty Executives Tuscaloosa - 205-758-1040
Realty Executives International - Where The Experts Are! Our Executives are experts in selling Tuscaloosa, Northport, the University of Alabama and West Alabama. Whether you need a cottage or a castle, call on us! With over 25 years of experience in the local market, our business is built on our reputation: We sell homes faster, and for a higher Percent of listed price than the average for our area. Find out why!
"“My wife and I were looking at putting our house up for sale last year and moving to another home closer to
our work. We had our house listed with two different Realtors, both signing 6 month contracts with each
realtor. We had multiple showings over that time but no offers for our house. We lowered the price multiple
times with the hopes of finding the right family that would want to buy it. We had no luck. After our contract
had expired with the last realtor, we decided to put our house up for sale by owner. We didn’t really know the
process and paperwork with selling our house, and we really didn’t have the time to thoroughly invest in
being available to show it on a moment’s notice, but we were hoping that we could eventually find the right
buyer and go from there. Again no luck with any offers. My wife was contacted by a realtor that she knew,
Phil Duke, and he asked if it would be possible that he list the house and wanted to schedule a meeting with
myself to go over his philosophy and what he could do for it. After meeting with Phil and listening to his
suggestions and observations with selling the house, we signed a contract with Phil to list the house. He was
upfront with what he considered a good asking price and what upgrades a buyer would tend to look for. This
was what we needed to hear. After one day of being placed on the market, we had an interested buyer take
a look at the house and make us an offer to buy! One day! We were thrilled. Phil looked out for us in the
selling process and made sure we were making the best decisions with every aspect of negotiations and
closing. After having our house for sale for over a year, we finally found the best realtor for us! We would
highly recommend Phil Duke with Realty Executives for anyone looking to sell or buy a home.”"