“Imperfect” Home Ownership Consistently Beats “Perfect” Renting
Posted on: July 13, 2012
Many people think of home ownership as something that will come along in the future. Not now, but sometime down the road when they are “ready” for it. Whether you’re in the process of hunting for your dream home now, or you’re years off from thinking about buying a home, putting off the purchase is only hurting you. Even imperfect home ownership beats perfect renting. Are you fully aware of the benefits of home ownership, and the potential costs of continuing to rent? It might make you think twice about putting off the search, and change your mind about waiting for the “perfect” home.
The Costs and Risks of Renting
Renting is a decision that many people make based on where they are in their lives, but renting comes with long-term costs and risks that people don’t consider. When you’re renting, you typically only think about how much your rent payment is and how that compares to a potential mortgage payment. But think about the behind-the-scenes costs of renting.
What if, while you’re renting, interest rates go up? If interest rates go up even two percent, you could find yourself paying thousands or tens of thousands of dollars more for your home during the life of your mortgage. What if housing prices go up? Appreciation doesn’t always happen in predictable ways; you could find your perfect home increasing in cost by $10,000 – or more – in just a matter of a few years. Again, this adds substantial cost over the life of a mortgage. These are the risks you’re taking, and the hidden cost of renting.
Reality and Your Dream Home
When many people compare an available home with their dream home, it comes up lacking. This is because many people have unrealistic expectations and visions of a “dream home.” Try thinking about your potential home in a different way. Compare a home you’re considering to other homes on the market. You may find that while it doesn’t match your vision in your head of a “dream home,” it’s a lot better than the other homes that are available and it’s the best option for you. Don’t wait forever for your dream home. Be realistic about what’s available, and make the right decision for you based on reality – not a vision in your head.
