{"id":6571,"date":"2017-08-02T15:15:34","date_gmt":"2017-08-02T22:15:34","guid":{"rendered":"http:\/\/www.roryc.ca\/blog\/?p=6571"},"modified":"2017-07-28T17:36:02","modified_gmt":"2017-07-29T00:36:02","slug":"why-buying-a-home-is-better-than-renting","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2017\/08\/why-buying-a-home-is-better-than-renting\/","title":{"rendered":"Why Buying a Home is Better than Renting"},"content":{"rendered":"<p style=\"text-align: justify;\">In most parts of the country, home buying is better than renting. Discover the advantages home buyers have in today\u2019s market that renters are missing out on.<\/p>\n<p style=\"text-align: justify;\"><strong>Why Buying a Home is Better than Renting<\/strong><br \/>\nConventional wisdom used to state that buying a home is always a great investment. But after the housing crisis, many people who saw their equity sliced in half began questioning this logic.<\/p>\n<p style=\"text-align: justify;\">That\u2019s unfortunate. In most parts of the US, home buying is still a better decision than renting for people who plan to remain in the space for at least 4-5 years or more, both for financial and emotional reasons. Let\u2019s explore some of these factors in-depth.<\/p>\n<p style=\"text-align: justify;\"><strong>Price Security in Home Buying<\/strong><br \/>\nHistorically, prices tend to rise over time. For example, a loaf of bread, a gallon of milk, and a semester of college tuition cost more today than they did in 1990.<\/p>\n<p style=\"text-align: justify;\">Your mortgage payment, however, is one constant you can rely upon. If you hold a fixed-rate mortgage, your monthly principle and interest (P&amp;I) payment remains the same, regardless of how prices are moving in other industries. (Your property taxes and homeowners insurance may rise.)<\/p>\n<p style=\"text-align: justify;\">Price consistency offers the advantage of planning for the long-term future. As a homeowner, you can anticipate your monthly housing costs in 5, 10 or 15 years.<\/p>\n<p style=\"text-align: justify;\">As a renter, you can\u2019t lock in this type of security. As prices climb, landlords raise the rent to meet the current market. In fact, some landlords write rent escalation clauses into their leases, systematically raising the rent annually.<\/p>\n<p style=\"text-align: justify;\">If you\u2019re renting with a month-to-month lease, your landlord may announce a price jump with only 30 to 60 days of advanced warning, depending on the laws in your area. This puts renters in the difficult position of needing to either find the additional funds or scramble to secure new housing with little advance warning.<\/p>\n<p style=\"text-align: justify;\"><strong>Investment \u2013 Cash-on-Cash Return<\/strong><br \/>\nAs a homebuyer, the outlay of a small down payment can give you the opportunity to make outsized gains.<\/p>\n<p style=\"text-align: justify;\">Hypothetically, for example, imagine that you put a 20 percent down payment on a $100,000 house. The price rises 5 percent, to $105,000. You would earn $5,000 on your initial outlay of $20,000 \u2013 a return of 25 percent. This is known as cash-on-cash return, and homeownership can make this type of gain accessible to the average person.<\/p>\n<p style=\"text-align: justify;\"><strong>Forced Savings<\/strong><br \/>\nA home can be a type of \u201cforced savings.\u201d Each month, a portion of your mortgage payment is returned to you in the form of equity. The longer you own your home, the more equity you build \u2013 both via mortgage payments as well as in potential value increases.<\/p>\n<p style=\"text-align: justify;\">Renters don\u2019t have this luxury. Many of the pro-rental arguments hinge on the assumption that money \u201csaved\u201d (either via lower monthly payments or through alternate uses of the down payment) would be invested in the stock market.<\/p>\n<p style=\"text-align: justify;\">Realistically, though, what\u2019s the likelihood that a renter would invest that money, rather than spend it on a trip to the Bahamas? And if that money were invested, what\u2019s the likelihood that a renter wouldn\u2019t panic during the next crash and sell at the bottom of the market, turning paper losses into actual losses?<\/p>\n<p style=\"text-align: justify;\">A home functions as \u2018forced savings,\u2019 helping you build equity. Like a personal trainer, it keeps you accountable.<\/p>\n<p style=\"text-align: justify;\"><strong>Flexibility with Home Improvements<\/strong><br \/>\nAs a homeowner, you can have the freedom to upgrade your home to your heart\u2019s content \u2013 without carrying risk or ongoing financial commitment.<\/p>\n<p style=\"text-align: justify;\">If you get a bonus at work, you can celebrate by installing hardwood floors or renovating the bathroom. If you suffer a financial setback, you can defer your plans to remodel the kitchen.<\/p>\n<p style=\"text-align: justify;\">Renters don\u2019t hold this flexibility. The only way they can upgrade their living space is by moving, and this entails both hassle and commitment.<\/p>\n<p style=\"text-align: justify;\">Homeowners, by contrast, can upgrade their home piecemeal as they accumulate cash over the years. Home improvements are a one-time expense that doesn\u2019t require continuous commitment.<\/p>\n<p style=\"text-align: justify;\"><strong>Pride of Home Ownership<\/strong><br \/>\nYou wouldn\u2019t invest hundreds of hours cultivating an exquisite garden in a rental property. You wouldn\u2019t hang wallpaper or replace the light fixtures on a rental property.<\/p>\n<p style=\"text-align: justify;\">As a homeowner, you can take pride in crafting, personalizing and perfecting your home. The space can truly morph into a reflection of you, in a way that a rental property never could.<\/p>\n<p style=\"text-align: justify;\"><strong>Neighborhood Connection<\/strong><br \/>\nAs a homeowner, you\u2019re more likely to become involved in your local community. There\u2019s a stronger chance that you\u2019ll join the neighborhood association, organize potlucks or block parties with your neighbors, coach a local sports league or volunteer at the local school.<\/p>\n<p style=\"text-align: justify;\">While it\u2019s possible that you\u2019ll get involved with the community as a renter, you\u2019ll also likely feel an emotional barrier that stems from knowing you might move in a year or two. Committing to an area for the long-term can inspire you to invest more time and energy into improving the neighborhood and connecting with the surrounding community.<\/p>\n<p><a href=\"http:\/\/blog.coldwellbanker.com\/blog\/why-buying-a-home-is-better-than-renting\/\" target=\"_blank\" rel=\"noopener\">7 Reasons Buying Beats Renting<\/a> by Alexandra Filiaci | Coldwell Banker Blue Matter<\/p>\n","protected":false},"excerpt":{"rendered":"<p>In most parts of the country, home buying is better than renting. Discover the advantages home buyers have in today\u2019s market that renters are missing out on. Why Buying a &hellip; [<a href=\"https:\/\/www.roryc.ca\/blog\/2017\/08\/why-buying-a-home-is-better-than-renting\/\">read more<\/a>]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[],"class_list":["post-6571","post","type-post","status-publish","format-standard","hentry","category-real-estate"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.7 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Why Buying a Home is Better than Renting &#8226; Rory C Real Estate | Oakwyn Realty<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.roryc.ca\/blog\/2017\/08\/why-buying-a-home-is-better-than-renting\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Why Buying a Home is Better than Renting &#8226; Rory C Real Estate | Oakwyn Realty\" \/>\n<meta name=\"twitter:description\" content=\"In most parts of the country, home buying is better than renting. 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