Home ownership has been a dream for billions of people all around the world.
In the modern times, because of a bigger mobility in workers from all kinds of industries, some found it’s better for them to rent, than purchase a home, and then move into another city or even another country.
Yet, a better option is to buy a home, even if it means bigger investments upfront and more headaches than just packing up and moving elsewhere.
Here are the main 3 reasons why I consider it’s better to buy a home than rent it
Mortgage payments can be smaller than rent
In many countries rent can be even bigger than your monthly payments, if you choose to get a mortgage. I don’t know who we need to blame, landlords’ greed, the rise in Airbnb apartments, the economy?
Truth is that most of my friends who still have a mortgage have reported smaller monthly payments or similar to the previous rent.
This already makes anyone think more about buying a home, since it’s easier on the budget and you are paying for your home.
Which brings us to the second reason …
I have collected a lot of horror stories from friends who couldn’t do any serious home improvements, because their landlords didn’t agree with this.
Some tried to get a deal with their rent (they’ll pay less rent for a while and pay for the renovation themselves), others just agreed to lose that money, so that they don’t live in a shack anymore.
Even with nice landlords (there are such people, afterwards), you are paying for someone’s home and not yours.
If you pay rent for 30 years, at the end of this time, you’ll still need to pay the rent, otherwise you’ll sleep under the bridge.
If you pay a mortgage for 30 years (provided you cannot pay it off sooner), at the end of these 30 years you’ll pay nothing anymore to live there (except for normal taxes, of course). It’s yours from the day you sign on the dotted line, provided you keep up with your payments.
As soon as you start your mortgage, you are free to do whatever home improvements you wish too, provided to abide by state and local laws. There’s no one to forbid you from painting your walls red or installing a new better heating system.
As soon as your kids grow up, you can leave an inheritance already.
Maybe it’s not a lot, especially if it’s a smaller house and there are multiple heirs, but it’s still something they can use.
We inherit 2 apartments from our folks and work to renovate a country house on our own, this leaves our daughter with 3 real estate units, 2 in a big city and one in a nearby village, that has a lot of potential.
It’s true we’ll also move out of the country in about 3 months, but the real estate we have is still valuable to us, since it’s a good retirement place (and a source of money – if we rent).
If not, we can sell it and the money would allow us to either get a smaller house in the US or at least pay a hefty down payment, which would get us some better mortgage deals.
Once you have real estate, there are already options on how to manage it and earn money from it.
It’s an investment
In most areas of the world real estate is one of the best investments possible.
We already know people who successfully buy and resell real estate with a hefty profit, people who get their apartments into Airbnb or similar short term rent systems, people who rent for longer term and so on.
You’ll tell me there were millions of mortgages underwater and, when crisis hits, real estate is one of the areas that gets a bigger punch.
But, at the same time, real estate is one of the industry that recovers nicely afterwards and, if you can survive financially the initial blow, you can do great once again. In such times big fortunes are gone and bigger fortunes are built.
These are just 3 reasons why I consider renting is not as cool as buying your home. What do you think?