The debate over renting a house vs. owning one has gone on for years, and everyone has a strong opinion as to why they think one is better than the other. Everyone’s circumstances are different, so for some people, it truly may be a better time in their life when renting makes more sense.
However, there’s no denying that owning a home has some serious advantages. Here are 40 reasons why it’s better to own a home than renting an apartment or house.
40. Buying a House is an Investment
First and foremost, buying a house is an investment in your future. When you buy a house, you are not just spending money on a place to live. You are investing your money into a property that belongs to you, so long as you don’t default and go into foreclosure. The value of the home may increase someday, due to inflation, a rise in the market, or if your local area becomes gentrified. Many people have been able to make a profit selling their home years after they bought them.
Real estate is considered to be one of the “safest” places to put your money compared to the stock market or opening a business. Even when the market is down, at least you’ll have a roof over your head. Since most people live in a house for at least 30 years, the value will rise and fall over time, but it generally goes up. For example, in the early 1900s, Sears sold kits for building a brand new house called Sears Catalog Home. The cost of the kits were just $360–$2,890. Today, you can’t even get a Tiny House for that much money. Those houses are now valued at well over $100,000 each due to inflation.
When you live in an apartment complex, you probably have a community park or barbecue area for everyone to use. The only trouble is that since it is being shared with everyone else, you may not feel comfortable using it. Or, you and your kids have to be mindful of the fact that you need to take turns. Most of the time, parents who live in apartments need to take their kids to a local park if they want to have an outdoor experience.
There’s nothing wrong with going to a park, of course. But having your own back and front yard can give you so many more outdoor experiences. You can hire landscapers to make it look exactly the way you want, and your kids can play whenever they like.
When you live in an apartment, your landlord will give you a list of things you can and cannot do. Usually, they will forbid you from painting the walls with dark colors. And if you don’t like the closet, light fixtures, kitchen cabinets, or anything else, you usually have to deal with whatever was in the apartment in the first place. Sometimes, landlords will allow you to customize certain things like a showerhead, but then you are responsible for putting the old one back when you move away. For the most part, you have to accept the rental as-is when you move in.
If you own a house, you can do anything your heart desires as long as you have the money to accomplish what you want. All of those Pinterest boards can finally come to life because you’ll be able to hire contractors to customize your home til your heart’s content.
All rentals require a security deposit, which is anywhere from one to two months of rent. This money is set aside for the day you move out. The landlord will inspect the apartment and decide if something needs to be repaired. They will then deduct the expenses from your security deposit and send you back the remainder of the money. If there’s a stain on the carpet, they may have to rip the entire thing out and replace the apartment’s carpeting, courtesy of you. Same goes with every other imperfection. The landlord can essentially get a newly renovated space for free.
When you own your own house, there’s no security deposit because you are responsible for your own repairs. If you are okay with a stain on the carpet, it can stay there for a while. (Or, you can hide it under furniture.) It’s up to you how much of a perfectionist you want to be. You can take your time making those repairs, unless it is something that needs your immediate attention, like a soccer ball through your window.
The definition of net worth is the value of your assets, minus your debts. A house is considered to be one of your biggest assets. For example, imagine that you own a $200,000 home and you are in $50,000 of debt from your mortgage and credit cards. On top of that, you have $100,000 in your retirement savings. This brings your overall net worth to $250,000.
So…why does your net worth matter? If you were renting for that same length of time, all of that money would be gone instead of going to your home. Assuming that you saved the same amount of money for retirement, your net worth would be only $100,000 instead of $250,000. Having a high net worth is more than just bragging rights. It’s a sign of your financial health, and how prepared you are for retirement, or in case of an emergency.
If you plan on having more than one child, you will eventually need more space for your family to live. When you are renting, it is typical for most complexes to only provide a one or two-bedroom option. This may mean that you can only have one child or force your kids to share a bedroom.
When you are looking to buy a house, you can think ahead to your future. How many kids do you want to have? Will they live comfortably in the space? If not, can you afford to build an addition?
When you are renting an apartment, you always have to be careful not to make too much noise. Your neighbors will hear you and complain to the landlord or the apartment manager. Normally, you just have to be mindful of the time of day and keep any argument quiet.
But when you own your home, you can be as loud as you want, within reason. Your kids can even start a band in the garage! If you are playing music, talking on the phone, or working out, you don’t have to worry about your neighbor listening.
Throwing a backyard barbecue is a lot of fun in the summertime, especially if you love to grill. It can be a great way to spend time outdoors and hang out with a lot of your friends. Some apartment complexes have a grilling area that you can use, but it’s often not large enough to accommodate an entire party.
If you’re renting an entire house or duplex, you can obviously grill in the backyard even if it belongs to your landlord. However, most people are less likely to invest in a grill, because they know that they will have to move it later. Grills can be incredibly heavy if you buy a high-quality model. Once you own a house, you will feel more comfortable investing in one, or even building an outdoor kitchen.
If you own pets, they will absolutely love being in the backyard. It may take some time for cats to adjust to a new place, but a dog will immediately begin running out in the yard with total joy. Most rentals are very small and cramped, which forces your pets to be in close proximity to one another. But in a house, they will suddenly have a lot more space to explore.
Taking care of your pet may also become a lot less of a hassle, too. Some people choose to let their dogs go outside on their own if they have a fenced-in back yard. This saves you from having to go on walks multiple times a day.
When you live in a small apartment, you cannot host your family for the holidays because there’s not enough space for everyone to sleep. As a renter, you might have gotten used to leaving to spend time with your parents or other relatives on special occasions. When you own a home, you’ll be able to become the hosts.
Transitioning from guest to host can be a really rewarding experience. Once you know how it feels to bring joy to so many people, you’ll probably want to host the holidays every single year.
When you’re paying rent, you never have to worry about paying property taxes. and the idea of having to hire an accountant and deal with all of those complicated numbers is enough to scare off a lot of people from wanting to buy a home. However many people do not realize that homeowners actually get some great tax incentives that could potentially help them pay less on their income taxes just because they own a home.
Homeowners are able to deduct the interest that they pay on their mortgage and they can also deduct their property taxes on their annual report. This effectively brings down their overall income and means that they are paying less income tax. Depending on your situation it may end up costing you more or less, or relatively the same as if you are renting. But you get the obvious benefit of owning the property in the long run. If you want to know more about tax incentives for homeowners, check out this guide by Nerd Wallet.
When you become a homeowner, you could decide to be a landlord someday. Or, you could choose to rent out an extra bedroom to a roommate to help cover the cost of your mortgage. This can all be done without asking anyone else’s permission.
Once you get this income coming in, it can help pay your bills, and make homeownership a lot easier because all of the expenses will be paid on someone else’s dime. Of course, you can also choose to sell the house someday and potentially make a profit on the sale so long as your tenants kept the home in good condition.
If you live in someone else’s property, you are at the mercy of however the landlord decided to renovate their house. They could have neglected to check on the insulation and you may find yourself living in a house that gets piping hot in the summer and freezing cold in the winter. This means that you are likely paying a lot on heat and cooling bills.
When you are the homeowner, however, you become responsible for checking on the energy efficiency of the property. You can choose to pay a contractor to re-insulated your attic, basement, and ductwork to prevent any leakage. It may cost a lot up front, but it should help you save money over the course of the time you’ll be living in the house.
When most people move from rental to rental, they tend to go through a lot of different furniture. Maybe they got a cheap item from Ikea or they got a second-hand piece from the thrift store. It’s common for people to give their pieces away, donate, or try to get some of their money back by selling on Craigslist. In a lot of cases, it’s cheaper for renters to simply buy new Ikea furniture instead of paying a moving company to bring it to their new home.
Once you become a homeowner, you know that you are most likely going to live on that property for at least 30 years. Suddenly, your mindset shifts from “how will I get this up an elevator?” to “Will I be happy with this couch for the next 10 years?” Homeowners tend to buy less furniture overall, but it’s high quality. This helps to save money over time.
When most people rent an apartment, they set aside enough money for rent and bills and not much else. In fact, most Americans go their entire lives without ever saving more than $1,000 in case of an emergency. As a renter, there is honestly not much else to worry about besides bills and personal goals. So it becomes all too easy to continue living this way for the rest of your life.
When you buy a house, it quickly becomes apparent that you may be faced with a lot of expensive surprises. You may have to pay for a repair unexpectedly that will set you back thousands of dollars. And you will still have to pay for your mortgage if you want to avoid foreclosure. So most people become far more money-conscious once they transition into being home owners. They are far more likely to make a budget and set aside money for the things they need. This makes them better with money overall.
When you’re a tenant, you’re always at the mercy of the landlord. If they decide that they want to sell the property, you have no choice but to move. After all, it’s their property and they have the right to sell it whenever they feel like it. You are under no obligation to move immediately and you have the right to stay until the end of your lease. However, this is still inconvenient at the very least. In a lot of cases, you may find yourself spending a significant amount of money to pay movers to bring you to a new place and you may be forced to pay more in rent somewhere else.
And of course you can also be kicked out of your place for a number of other reasons. Maybe you decided to ignore the rules about not having pets. Or maybe you had a difficult month where you weren’t able to pay your rent. A landlord has the right to evict you if it was stated in the contract. When you are a homeowner you have the ability to decide how long you live at that property. If you are loud, own pets, or anything else that other landlords may not agree with, it doesn’t matter. And even if you miss your mortgage payment, you won’t be out on the streets immediately because foreclosure litigation takes a very long time. In most cases you have a far larger grace period. With a bank, you have more of an opportunity to get yourself back on track as compared to missing rent.
When you are renting an apartment or house, you may be limited to the number of parking spaces that you have available. Some apartment complexes even have a rule that each tenant can only have one parking space and one car. Other properties are located on a street where you may not even have a driveway to put your vehicle. Even if you do have a driveway in a home, a lot of renters have roommates to share that space with. This may mean having an overcrowded driveway or getting into disagreements over who gets the closer spot.
The perks of being a homeowner are obvious. Once you decide to invest in a property it becomes your responsibility to decide how important parking space is for you. And if you were the only person living in that home you get first dibs to the driveway every single time. You can also choose to buy a house that comes with a garage.
Renting a room or an entire house on Airbnb is a great way to make extra income. Some renters get away with subletting their apartment occasionally on Airbnb if their landlord allows it. However, most landlords will have a clause in the contract that prevents you from subletting your apartment to avoid any potential damage. This means that you will not be able to have an Airbnb listing until you become a homeowner. A lot of major cities also are beginning to have restrictions on the number of Airbnbs that can be in that area because they do not want properties to be taken over by tourists either.
Once you become a homeowner, you can decide to rent on Airbnb if that’s your goal. If it’s very important to you, it’s simply a matter of buying a property outside of a city so that you no longer have to worry about tourism restrictions. You could choose to rent out a single bedroom for maybe $30 to $50 per night, or you can rent out your entire house for as much as $200-$300 a night. For a lot of people, this additional income just might cover your mortgage payment.
When you become a homeowner, you’re fully responsible for all of the repairs that need to be done on the property. This can be both a pro and a con. Some people don’t like the idea of being responsible for anything that goes wrong in the house because they are used to the convenience of handing it over to the landlord. However, the beautiful thing about being responsible for the repairs is that you get to decide exactly what goes in the space. For example, if you know that the cabinets are looking outdated in the kitchen, you can decide to completely renovate or paint them. If there is an old and outdated faucet in the bathroom you can easily go to Home Depot and get it replaced. This can be done on a whim and there is no need to ask anyone for permission as long as you can afford it.
As a renter, you have no control over any of these things in the property. Most of the time, everything has to be dealt with as is. Many landlords are not concerned with making anything more luxurious or comfortable because they’re trying to cut down on costs. On top of that, you often have to submit a request to get something fixed and you may end up waiting a long time to get things done. As a homeowner, you can choose to pay for a high-quality renovation that suits your standards and it can be done as quickly as humanly possible.
When you buy a house, you have the ability to “flip it,” which means buying a house that needs repairs, getting the work done, and then selling it for a profit. Some people manage to make tens of thousands or even hundreds of thousands of dollars in profit if they flip a house. Obviously, renters can never do this because they don’t own the property.
If you’re thinking about flipping a house, always make sure that you do a lot of research into what renovations actually increase the property’s value. Also, compare the houses in the surrounding area to get a good idea of how much you could potentially increase the home price. Last, but not least, always keep your receipts any time you do a home repair. When the times comes to flip the house, you’ll have to pay taxes but you can deduct the amount of money you put into repairs.
In urban areas, you’ll find people renting from all walks of life. In places like New York City or San Francisco, you need to be a multi-millionaire to own property, so 99% of people rent. However, in most other parts of the United States, there is a clear divide between people who own houses versus people who rent. The neighborhoods they live in are often drastically different. The quiet, safe rural or suburban areas with a low crime rate and good school systems typically have houses with owner-occupants. And whenever these towns do make the effort to build apartments or townhouses, the rent prices are typically very high.
This means that most rental options are usually found in lower income areas. Or on the flip side, apartments may be a high-income area, but it is far more urbanized. There doesn’t seem to be much of an in-between. Because of this, you wouldn’t be able to send your child to a good school unless you paid out-of-town fees. As a homeowner, you can choose the best neighborhood and simply find a house within your price range. Then you get access to the best schools, low crime rate, and everything else that matters to you.
Many towns have a community garden available so you can grow fruits and vegetables even if you live in an apartment. However, you have a very limited amount of space. If you own a house, you can create a vegetable garden in your own backyard and use as much land as you want.
Building a backyard garden takes a lot of work and dedication. For the people who do it, they truly feel as if it’s worth the effort. It’s truly special to be able to walk into your backyard, pick fresh vegetables, and incorporate them into your cooking without having to go to the grocery store.
There are many homeowners who are now considering becoming modern-day homesteaders. Years ago when the United States was expanding Westward, the government decided to give people incentive by offering free or cheap land to people. A lot of travelers came with the intention of starting a self-sustaining farm. In most cases, these original homesteaders did not have any neighbors to collaborate with. They may be 50 miles away from the nearest town and it would be nearly impossible for them to get anything that they needed. It became essential for them to be self-reliant. These were called “homesteads,” and there was a certain lifestyle that became essential to survival. On these homesteads, people would grow all sorts of crops. Many people own chickens so that they could have fresh eggs for breakfast every day, and they kept livestock for meat. Most people even had their own dairy cow.
Even though this is an old-fashioned concept, it has begun to re-emerge in recent years. A lot of people struggled after the 2008 recession. This sparked a lot of questions in people’s minds. Is it really the best decision to rely on grocery stores and modern society for everything? On a homestead, you can grow all the food that you need without ever having to pay for it again. This is obviously very attractive to a lot of people, especially if they’re interested in an eco-friendly lifestyle. People who become homesteaders are usually able to live off the grid, especially if they install solar panels and their own septic system. Obviously it would be impossible to become a homesteader in a rental. You would not be able to modify the landscaping or the home to meet the needs of going off the grid.
17. Your Fixed Mortgage Will Not Go Up (But Rent Could)
Most mortgages are fixed so that you are going to pay the same amount every month. This should last for the next 30 years of your life. Aside from the average inflation, it should never cost more month-to-month. Even if the value of the home were to go up, you’re still paying for the original mortgage price. For example, if you purchased the house for $100,000 and 10 years later, the town becomes gentrified, the house may be worth $200,000. You basically get that home for half price and will never have to pay the bank more than the original amount you agreed upon.
That’s not the case if you are a renter. In this same scenario, if a neighborhood becomes gentrified and people are moving in with more money, this means the rent is likely to go up. After your lease has ended, the landlord has the right to increase the rent to match the average of the surrounding area. So you have no choice but to pay the more expensive rent or look for somewhere else to live.
In the years following the 2008 recession, mortgage rates dropped to help incentivize new home buyers. Very recently, mortgage rates began to climb back up again. So there may be a limited window of time that you can get in on these good deals. However, there is still the option that you could always take out an FHA loan and hopefully, that will be around for a long time. These are government-backed mortgages that are specifically set out to help first time home buyers.
You only have to put down 3.5% as the down payment instead of the standard 20%. For example, if you’re buying a house that costs $100,000, you would only have to save $3,500 for the down payment instead of $20,000. This is a significant saving and the overall interest rate over the course of 30 years is going to be lower compared to a traditional mortgage.
When you invest in real estate, you have the ability to leverage your money. This is a term that means that you can take a risk in the hopes that your money will be worth more later. Obviously, rent is not an investment. You can never make money on that payment and once you give it to your landlord it is gone forever. But if you have a significant amount of savings, you could choose to leverage it instead of giving it away.
Investopedia has an in-depth guide explaining leverage and how it works. But basically, let’s imagine that you had $100,000 saved in your bank account. There is a lot you could do with that money. It could pay for your rent for several years. Or, you could take that $100,000 and use it as the 20% down payment on a property that is worth $500,000. If that property value appreciates by just 5%, the house will become worth $525,000. You are able to take that original $100,000 and earn a $25,000 profit. Of course, it doesn’t always work out that way. The value of the home may actually go down, and you might have been better off just buying a cheaper house for $100,000 flat. But no matter what choice you make, you still have this potential to earn a profit through leverage instead of just giving it away in rent.
According to Zillow, houses can appreciate in value an average of 3 to 5% every year. In some cases, you may be surprised to discover that your house may appreciate even more than that. Just like the stock market, the housing market also has years where it has extreme highs and lows. However, the appreciation over the course of your 30-year mortgage should always average out 3 to 5%. This means that over time, your real estate investment will be worth significantly more money. Most homeowners are able to sell their house for more than what they paid for it as long as they keep the home in good condition.
This is an obvious advantage over renting. As a tenant, you’ll be oblivious to the fact that the property you were living in may be appreciating. Your landlord will be able to enjoy the benefits of owning a property that’s worth more every year.
If you are raising a family, there may come a point when you realize that you simply do not have enough space to comfortably accommodate everyone’s needs. Maybe you need an extra bathroom, or your kids are getting too old to share a bedroom. When you’re renting, you have no control over how big the space is and you’ll be forced to move into a larger apartment.
But when you own a home, you have the ability to add on an addition as long as you have enough land to do so. If you add an extra bedroom or bathroom to your house, this will also increase your home’s value, and you will eventually get more money when it’s time to sell.
Some of you may see this and think, “Wait a second – don’t you need to build credit first, and then buy a house?” Yes, you do. Even if you get a great deal with a first time home buyer FHA Loan, you still need a minimum credit score of 590. This means that you need to have been building credit for a few years before you buy a house. However, owning a home can get you closer and closer to an “excellent” score of 750 or above.
Why does getting an “excellent” score matter? This can open you up to the possibility of getting some exclusive credit cards with rewards that are just for VIPs. It can also help you buy a second home in the future if you had the goal of owning multiple properties.
Most mortgages last for 30 years. It’s possible for you to overpay on your mortgage payments in order to get it paid off a few years earlier. But no matter how long it takes, you will eventually own the house outright. Even if you cannot accomplish this until you are old enough to retire, it will still be a great achievement.
When some people retire and pay off their house in full, they choose to sell the home and downsize to a smaller space. This will leave them with a big chunk of money to live comfortably on during their retirement. In this way, buying a house is like having a built-in retirement plan.
When you live in an apartment and you need to store something, you have no choice but to rent a storage unit. For a lot of people, this can become a huge waste of money to the point where the value of their items is less than the amount of rent. Many people eventually abandon the things they are storing. According to Sparefoot, the average household pays $88 a month in storage unit costs. Over the course of one year, this amounts to $1,056.
If you own a house, you most likely have an attic and a basement to store all of your things, instead. And if you really needed extra space, you could buy an outdoor shed for less than the price of one year of renting a storage unit. And you get to keep it forever.
When you buy a house, you begin paying property taxes. Once you become a taxpayer, it’s official. You are really a part of that town, and your tax dollars mean something to the community. Sure, it’s possible to feel like you are a part of the community as a renter, too. But for most people, if they know in the back of their mind that they’re eventually going to move, they may not make as much as an effort to truly become a citizen of that town.
As a homeowner, you may want to start showing up to town hall meetings, helping with community service, or voting for local politicians. You may also feel motivated to meet your neighbors and become friends with the people in your local area because you know you’ll be there for a long time.
Many landlords have a “no pet” policy because they do not want to run the risk of your furry friends causing damage to the home. They have a real reason to feel paranoid. Animal waste that is not cleaned up quickly can actually seep through into the wood underneath the floors. That smell is impossible to remove unless the wood is ripped out. So your landlords actually have a very good reason to deny having pets and it’s something you should take into consideration for your own home.
Even when rentals do accept animals, many landlords have rules about the number of animals or the size of your pet. You can usually only have one or two pets, or “cats only” if the space is particularly small. Unfortunately, when people start to get a lot of pets, it can get out of control. And in all honesty, cramming a lot of pets into a small apartment is going to lower their quality of life too.
Even when you are allowed to keep a dog or cat in your apartment, there are usually breed restrictions of the kind of dog you are allowed to own in that community. This is not just because your landlord is a jerk. Believe it or not, many homeowners insurance companies will deny you coverage if you own certain breeds of dogs. Some examples of restricted dog breeds are Pit Bulls, German Shepherds, Great Danes, Akitas, Rottweilers, and more. (Check your insurance company for their restriction list.) So, even if your landlord loves those types of dogs, they need to do what is best for their business.
Same goes with exotic pets. If you own a potentially deadly snake, you are likely to not get covered. And some people are okay with that. Once you own a home, that’s up to you to decide if you feel that having the animal you want is more important than covering your property in case of an emergency.
When you first buy a house, it is significantly more expensive than renting. Your down payment, closing costs, and initial repair costs are much higher than a security deposit on an apartment. However, after a few years, the cost of owning a house will be significantly cheaper. Typically, the cost of a mortgage and taxes will immediately be cheaper than paying rent and you get the benefit of owning an entire house instead of only having an apartment.
Think about it this way: your landlord still has to pay for taxes, repairs, and their mortgage each month. They would never be doing this in the first place if it was not profitable for them to do so. So essentially, your rent money is going towards giving them a free house when you could be using that same money to get your own property.
You have probably heard the term “equity” thrown around on HGTV’s Fixer Upper, but do you really know what it means? It is when your home is worth more than what you owe on the property. So if you were to sell it, you would actually get money back. For example, let’s say you only spent $100,000 buying a house and fixing it up, but you have the ability to sell it for $150,000. This means that the house has $50,000 of equity.
Usually, you can achieve building equity when you buy a property that is a good “fixer-upper”. Or, you maybe got a really good deal on a home, and were able to sell it once the value appreciated. This is a great way to grow your money and overall net worth. Obviously, you would never be able to do something like this if you were renting, since your rent money is going to pay off your landlord’s mortgage.
One day, your kids will grow up and move away. If you live in an apartment or a rented house, you may eventually end your lease and move somewhere else. This means that your kids will never be allowed to go back to a “family home” that is filled with all of their childhood memories.
This is one of those things where if you have experienced it firsthand, you know exactly what it feels like to go back home as an adult. Having a family home gives you a sense of security to know that no matter what happens, your parents can provide you with a space to sleep. However, if you are renting and you immediately downsize to a one-bedroom house once your kids are older, they will never have that option.
If you are moving from place to place every few years when your lease runs out, chances are that your kids will need to change schools. This means that your children will have to say goodbye to their friends and make new ones. According to the Institute For Family Studies, when a child has to undergo the constant stress of instability, they’ll do poorly in academics and it can hurt their mental health.
When you buy a home, you’re giving your children a place where they can get comfortable. It will become easier for them to make friends and feel a sense of security. Before you commit to buying a house, you should do some research into the quality of the local school system on Neighborhood Scout.
Ever since the 2008 recession, there has been a growing number of people who are interesting in living “off-the-grid.” This is when someone has the ability to live comfortably with electricity, food, water, and a working toilet without being attached to the main power grid or sewer system. People who subscribe to this lifestyle save a lot of money in energy over time and it is ultimately better for the environment. They will also be one of the last remaining safe havens during an emergency.
Of course, this lifestyle is only possible if you own your home. When you are renting, you have no choice but to use the same power grid as everyone else in the community. And if somewhere were to go wrong, you would have to deal with your landlord.