By Jule’ Dunham
Greetings from the World of Real Estate with Julè. Life is Good!
Time to move on to information about the Advantages of Owning and Renting. Now we are going to move to the “Disadvantages of Owning and Disadvantages of Renting”. Here we go! Let’s start with the “Disadvantages of Owning” shall we? 1.) Maintenance. Remember, during the life of the loan you’re your home, you are responsible for maintaining the home as per your lender’s agreements. It is not “your” home until it is paid in full. In other words, if you still owe money on your home, it still belongs to the lender and you are responsible for protecting the investment. While insurance is available to protect against expenses from major catastrophes, everyday maintenance items are the owner’s expense. This can be anything from painting or replacing the HVAC unit, hot water heater, busted pipes, etc. Regular maintenance will also include lawn care, leaf control, cleaning gutters, leaky faucets, and so on. 2.) Upfront & Closing Costs. Buying a home entails numerous upfront costs. Some are paid out of pocket once the seller has accepted your offer and others at closing. These costs include earnest money, inspection fees, down payment, home appraisal fee, property taxes and homeowner’s insurance. 3.) Loss of relocation flexibility. It is much easier to break a lease and move out of town than to sell your home and move out of town. Having to deal with the sale of your home if it hasn’t sold before you have to relocate can be quite stressful. Such as dealing with the mortgage on your home while it is still on the market and paying rent or another mortgage note in your new home. 4.) Financial loss potential. Homeownership builds equity over time; however, equity doesn’t equal profit. If home values in your area go down or remain stagnant during your time as a homeowner, the appraised value of your home could decrease, putting you at risk of a financial loss when you sell.
“Disadvantages of Renting”. 1.) No equity. The monthly rent you pay goes to the landlord. It represents the fee you pay while you are using the property. You gain no ownership in the property, no matter how long you live there. 2.) No tax benefits. While homeowner’s can deduct property taxes and mortgage interest on their tax returns, renters aren’t eligible for housing-related federal tax credits or deductions. 3.) Home improvements go to the landlord. Any structural or decorative home improvements renters make belong to the building owner and will have to stay behind when you move to a different location. Additionally, approval may be required from your landlord for any major decoration such as painting, adding a different light fixture among other changes you wish to make to the landlord’s property.
When it’s all said and done, the decision to buy or rent depends on the prospective homebuyer’s circumstances. There is no denying, that a home of your own is a good financial and emotional investment. An investment in a home can also mean an investment in the future of your children. There is much to consider when you want to buy a home. Switching from renting to homeownership is highly challenging, but an exciting decision to make.
A reminder for you is that when you buy your home, maintaining it is so very important. Keeping it neat and clean inside and out is not only important for you, but for your neighbors as well. You want to live in a nice neighborhood and so do your neighbors. Hopefully, these articles on home buying are beneficial to you.
Remember: Say Hello. Be Kind. Be Friendly. Embrace Life and all that it really offers. Keep Life Simple. Making good relay relationships is very important to our mental, emotional and physical health.
Should you have a topic you would like addressed, please feel free to contact me.
Thank you for reading my column and have a blessed week.
Here is your local realtor, Julè Dunham, signing off until next week.
Crye-Leike Realtors
Julè Dunham, Affiliate Broker, SRES, RENE. Contact her by phone at 901-828-8471 (cell) or 901-840-1181 (office) or by email to: [email protected] for an appointment to speak with you, your group or club. “Let’s Make This Happen Together”
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