As we get older and graduate from school we start to feel the increasing pressure of home ownership. Buying your first home can seem like a great idea in theory, but it is for everyone? Is it the right time for you?
We’re going to discuss the pros and cons of buying your first home and alternatives for you if you think it’s just not your time!
Just as a little disclosure, I am not currently a homeowner but I am saving money with plans to purchase property in the next two or three years. I just don’t want anyone to think I’m biased in one direction or the other! Do what you think is best!
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CONS of Buying Your First Home
When you own a home you aren’t able to just pick up your stuff and leave. You’re stuck with the home until you can find someone to buy, which can take months or even years if you aren’t in the right neighbourhood.
Change in Needs
If you buy a home when you’re young (especially if you’re single) chances are your needs are going to change drastically in the next 10 years and you’ll find yourself buying a new home pretty soon. You’re probably going to have a significant other who doesn’t see that home as theirs and possibly pop out a few babies, and then your 2 bedroom small home that you bought at 25 isn’t going to be an ideal situation.
The best thing about renting is that if something breaks, you don’t have to fix it or pay someone else to fix it. Isn’t that great? Now I know sometimes landlords can take a bit of time to get over there or to hire someone else to check it out, but at least it isn’t coming out of your pocket, right? When you own your home every single repair is your responsibility and they can get super expensive, super quickly.
If your money is tied up in a home you aren’t able to use that cash to make yourself more money. When you buy a home you need a decent amount of money for a down payment which for a lot of people is their entire life savings. You could have taken that $20,000+ and used it for an investment and had your money make you money for many years to come.
Decrease in Value
Whenever you buy something, there’s always a chance that it is going to decrease in value if the circumstances change. You don’t know what is going to happen to that neighbourhood in 10 years time. Maybe a bunch of drug dealers will move into the neighbourhood, or a local development will be rezoned and turned into a factory. You never know what’s going to happen and so many things can stop your home from increasing in value.
PROS of Buying Your First Home
Owning a home is for most people, the most important asset they own. Putting money toward a mortgage allows you to build an asset instead of throwing your money toward rent and never seeing it again.
If you purchase property that’s a duplex, or triplex, you have the opportunity to live in one section of the home while renting out the other side which will increase the money in your pocket. Also, if you decide you no longer want to live there you have the option to keep the property as purely rental income whether or not it’s a duplex.
When you have a mortgage there is nobody that can raise your payments like a landlord can raise your rent! Owning a home means you can have reliable consistent monthly payments that won’t go up year after year.
There are quite a few tax-deductions made available to homeowners. In some places, you can deduct some of your interest paid on your mortgage from your taxes as well as deducting some of your property taxes.
Don’t like the tile in a home you own? Change it. Don’t like the wall colour? Paint it! One of the joys of owning a home is that you’re able to change absolutely anything you want and personalize it without having to ask your landlord.
Someday you’ll be mortgage free. Can you imagine? Living in a home that’s 100% yours, completely personalized the way you want it and without any rent costs for the rest of your life. That sounds like a pretty sweet deal.
Some landlords can be pretty rough when it comes to things you aren’t allowed to do. If you own your home you’re able to have parties whenever you want, have as many dogs (or other pets) as you’d like! Nobody can tell you what you can’t do inside your own home!
Mortgage payments that are made on time are an excellent way to increase your credit score and make the rest of your financial life easier!
There are so many factors that go into this life-changing decision, and you shouldn’t take any one of these factors lightly. Do you own a home? Or did you ever own a home? Let me know in the comments how you feel about home ownership and the factors that made you decide how to handle your living situation!
Thanks for reading,