Buying a home is a big financial decision. There is the upfront cost of the building and the mortgage, upkeep, and any repairs you must pay for out of pocket. But after renting for several years, you may feel like you’re ready for the next step of homeownership- after all, it’s part of the American dream. To help educate you, here are the pros and cons of buying a home.
Pro- Long term investment
Owning a home helps you build equity. This means, unlike renting a property, the value of your home rises the longer you hold it if you keep the property in good condition. Whether you decide to sell your starter home in five years to upgrade or decide to downsize your home when you retire, you’ll likely make a profit. This long-term investment is one of the best reasons to consider buying a home.
Con- Long term commitment
Unlike renting, you can’t quickly move to a new apartment in a new city when you own a home. You have to think carefully about where you want to live long term and what your long term place of work will be. When you decide to “put down roots” somewhere, you’re rooted to the spot until you can sell your home for a profit.
Pro- More freedom to live
While you may have less freedom in terms of where you live, you’ll have more freedom in how you live. You can decorate your home how you wish, enjoy the outdoors with your backyard, and have pets without worrying about the pet rules in your property or extra fees. You’ll also have more privacy to do what you want in your own home without worrying about the landlord.
Con- High cost
Though your home will likely appreciate over time, it’s not guaranteed, as the housing market crisis of 2008 showed. There’s also the high upfront cost of buying the home and paying the mortgage, as well as repairs and other fees they don’t often tell you about—things like property taxes, HOA fees, insurance, and utilities. Be ready for these expenses should you decide to buy a home.