Renting and homebuying have their own advantages and disadvantages, and it can be difficult for many people to decide which is better for them. However, because of rent increases, more people are choosing to become property owners. Besides, it has more benefits and fewer losses. They can save more money by being an owner than being a tenant.
Why There’s a Rent Increase Every Year
One of the reasons rent inflates is high demand, especially with the pandemic still ongoing. Rents are much more valuable in popular cities and near workplaces, tourist spots, and festival venues.
By 2016, 36.6 percent of household heads in the U.S. rent instead of buying their own property to live in. Plus, with many young adults and some families moving into different states and cities, tenants are increasing. However, many people decide to buy their own properties by the time they can already afford them.
Yearly rent increase is one primary reason. Landlords increase their rent every year to go with the cost of owning and maintaining or improving their property. Other reasons are increased taxes or simply to increase their profits. They do this in reaction to economic trends and demands.
With more job opportunities and nearby popular establishments, the economy grows with home values as well. Because of ever-growing demands for rental properties, landlords increase their rent by approximately two to five percent each year. It can also be due to budgeting issues with tenants.
Costs in the market continue to change, like property cost, current interest rates, insurance, maintenance costs, and municipal charges. These factors differ depending on the regulations in your local area.
Rents are also bound to increase when the neighborhood has modifications, especially if it has schools, hospitals, grocery stores, restaurants, and entertainment centers. Availability of public transportation is also a feature the manipulates rent value. Not only is this kind of neighborhood attractive, but it’s also very convenient.
Why You Should Give Up Renting
The yearly rent inflation and other rental demands provide you with more losses than benefits. The best way to avoid this is to buy your own property once you can. Consult mortgage companies and down payment programs to start off saving for it. Paying your rent just helps the landlord pay for their loans and other financial obligations, leaving you with nothing.
Paying off your home loan gives you benefits, such as low interest rates, tax incentives, and growing equity. Not to mention your bills are more steady since you don’t have to worry about rent anymore. Once you’re done paying off the mortgage, it would be another tremendous change in your life, just as it was when you were just starting off. Only this is more relieving and fulfilling.
Most homebuyers can already close a home loan with less than the first month’s rent, along with the application fee, security deposit, and any other home rental costs, which total up to thousands as well.
Other Benefits of Home Ownership
You can secure more financial futures once you become a homeowner. Nowadays, home values generally increase by three to four percent every year. This is also one of the reasons landlords increase their rent.
Putting money into homeownership is putting money into an investment, while paying rent means a no-interest account. This just shows paying for your own house or property gets you further in life while renting potentially creates more problems for you.
As a tenant, you don’t have a say over whatever appliances you want to have in your home. As a homeowner, you have more control over what you want in your house, such as design, furniture, and appliances.
What About the Risks?
Being a homeowner isn’t just building equity and lowering costs. Besides the immediate payments that have to be done and organized to own the property in the first place, keep in mind that finances won’t end there. There are still some financial risks, which hopefully is nothing you won’t be able to handle if you’ve been responsible for paying off the mortgage.
Some biggest financial risks once you’ve bought property are maintenance costs and home improvements. There is no longer a landlord to take the responsibility of handling home maintenance and repairs. You’re your own landlord now. Since you decide how your house will be, everything you want to be changed and improved is your responsibility—emotionally and financially.
Whether you’re renting or owning your home, there are difficulties. Whether you want to shift from one to the other depends on your lifestyle and sense of responsibility. Keep in mind that the more it involves gaining money, the more commitment and effort it requires.