Rent Vs. Buy: Why Owning Your Home Is the Best Choice in 2021
Whether to rent or buy a house is a decision that will affect your life for years to come. It also has a major impact on your financial health. Therefore, this is a matter you need to consider very carefully.
That said while being a homeowner has some disadvantages, the benefits you get far outweigh them. It’s true that renting is a good choice in some situations. This was aptly proven a few years ago by the millennials, an entire generation that opted for rent vs buy. However, times are changing and even the aforementioned millennials are buying properties with fervor now. The year 2021, in particular, is a good time to make this investment.
When Is Renting a Home the Right Choice for You?
The main advantages of renting a home are flexibility and predictability. When you rent, you can move easily whenever you need it. If your job requires a lot of traveling or if you aren’t yet set in your desire of where to settle, this flexibility is very important.
Also, having predictable housing expenses every month can be a great help if your budget is tight. However, you need to remember that the size of your rent might change when you renew your lease. In fact, if you live in a good neighborhood, rent can go up by a large amount regularly.
Another huge advantage of renting is how stress-free it is. Your landlord is completely responsible for the property maintenance and repair. This means that you won’t have to pay out of pocket should anything break down as a homeowner would. But at the same time, some landlords take a long time to provide repairs and those might not be up to your standard.
That said, freedom and flexibility matter greatly for people who prefer to not be tied down. If this is your situation right now, the main question for you should be whether it’s best to rent a house vs renting an apartment. However, if your goals are long-term wealth growth and the feeling of security, buying is definitely the best option.
Benefits of Buy Vs. Rent: Undeniable Perks of Homeownership
Homeownership brings you many intangible benefits as well as helps build up your wealth over time. First of all, buying a house gives you an asset that should generate equity over time. It’s true that you might not be able to sell it fast in an emergency. However, the appreciation rate makes this investment worth it anyway.
It’s true that as a homeowner you are the one to pay for any unexpected repair as well as regular maintenance and improvements. But you are also free to decide exactly what you want done. As the property is yours, you can make sure everything within it suits your tastes perfectly. Moreover, a good homeowner’s insurance can help reduce many of the costs.
Also, you need to remember that owning your home allows you multiple tax benefits. Therefore, all things considered, the monthly cost of homeownership isn’t much different from the monthly rent. In fact, according to SmartAsset calculations, renting the same property for two years will be more expensive than buying and paying a mortgage. In addition, buying means that your wealth grows steadily while renting gives you no equity or additional tax benefits at all.
It’s true that there might be some drastic situations when the value of your home doesn’t grow as it should. However, even then you have a tangible asset and home security in it. You can also turn it into a source of additional income by renting out a part of the property.
The Housing Market of 2021: Why Now Is the Best Time to Invest in a House
At the first glance, it might seem that buying a house in 2021 isn’t the best decision. It’s true that the economy is in a recession and the housing market is rather volatile. It’s also undeniably a seller’s market now and house prices are growing fast. These certainly aren’t ideal home buying circumstances.
However, you also need to consider the advantages unique to the current situation. It’s true that the recession hit everyone hard, but it’s also the reason why mortgage rates are at a record low. What’s more important is that experts predict they will stay low for a while, even as the economy begins to recover. House flipping profits are also the highest they’ve been in the past decades. Therefore, if you can get into that now, you should take the chance. The same goes for the demand for rent. Buying an investment property now is sure to bring a good return fast, so higher prices are well worth it in the long run.
Finally, the inventory is sure to open up as time goes by and the pandemic recedes. This means that the market will not be so dominated by the sellers, but low mortgage rates will remain. Therefore, as the year progresses, buying a house should become an even more attractive option.