Those who move away from their parent’s homes for the first time tend to move into an apartment or rent a room in someone else’s home. Renting is convenient and easy, especially for those who have no other responsibilities but themselves.
But after a certain point, many people get sick of paying rent and decide to buy a house instead. Or, they start a family and simply need more room and stability to grow. These are just some of the various reasons why people buy houses.
1. They Are Tired of Throwing Money Away
Many people see paying rent as essentially throwing money away. At the end of the day, you’re helping someone else pay for their mortgage – your landlord for instance. Instead of spending thousands of dollars a year for a room or an apartment that they’ll never own, some people decide that enough is enough and decide to buy a house instead.
While you need to have enough money saved or loaned to you to give up a significant down payment, many people find that when they buy their own home, their mortgage payments are lower than their rent was. Not only that, but their payments are going toward their goal of eventually owning their own home.
This was certainly our case when we bought our first property, a condominium in the West Los Angeles area. We saw a condominium for sale when it was a buyers market.
I did the numbers, and it was clear that the mortgage payment would be the same as the rent we were paying in the same area within a couple of years. We pulled the trigger and bought it for $400,000. Seven years later, we sold it for $600,000.
2. Stable Payments
When you rent a home or an apartment, your landlord can easily raise rent on you at a moment’s notice. Unless you live in a rent-controlled apartment, there’s not much you can do about this except paying the extra money or find someplace new to live.
Rather than dealing with the instability that comes with paying for rent, many people opt to purchase a home instead and get a fixed-rate mortgage loan. With this type of loan, your monthly payments are always the same and will never increase.
3. They Consider It an Investment
Much like the stock market, the price of homes tends to rise and fall. Neighborhoods are constantly changing, which also affects the value of a home. Those who are savvy about these kinds of things tend to get ahead of the game by buying homes in neighborhoods that are up-and-coming. Once the neighborhood has reached its peak, they sell the house for significantly more than they bought it for.
Others choose to keep the home and rent out the rooms to gain more profit. It might take years before a home starts to gain value, so it’s certainly not an investment for everyone. But if you can part with a large chunk of your money for a few years, your return may be worth it.
Our condominium purchase in West Los Angeles turned out to be a good investment, but we didn’t buy it with the intention to make a profit. We enjoyed it very much, but we had an opportunity to buy a house at the time, and we pulled the trigger again.
4. They’re Tired of Dealing with Landlords
If you’ve ever rented a room or an apartment, you know just how difficult it can be to deal with landlords at times. They’re either constantly in your business, or not around enough.
Other times, they can be extremely demanding in terms of their requirements for you to live there. Because of this, people opt out to buy a home instead of having to deal with a landlord they don’t like.
5. Getting Tax Breaks
Unfortunately, you don’t get any sort of a tax break when you rent. On the other hand, when you own a home, you can typically deduct certain expenses, such as:
- Mortgage interest
- Loan points
- Real Estate taxes
- Home improvements
- Energy-efficient modifications
6. Pride of Ownership
Most people gain an intangible benefit with homeownership: pride.
Not many people can buy a home. And it is not always a question of having a lot of money. Some people end up purchasing properties with modest incomes. They set up a goal to buy a home, and they make sure to accomplish it.
The intangible feeling of pride these people achieved is priceless, as it may even inspire future generations to do the same.
7. They Need More Room
Once you start a family, you will need much more space for them to grow in. Because of this, people end up buying a home. Other times, people may simply need the extra space for other reasons.
For example, they’ve started their own business and want a home office. Or, they’ve always dreamed of having their own home gym. Pet owners may also want a large backyard for their pets to run around in as opposed to keeping them locked in all day in a tiny apartment.
8. To Have More Freedom
When you own your own home, you don’t have to ask for permission to do pretty much anything. You can renovate your house at your whim, let as many people live there as you please, or even put up a fence so you never have to deal with your neighbors.
When renting, you are limited to the rules of your landlord on what you can and can’t do. For example, some landlords may not even allow pets on the premises, which can be a real issue if you happen to have some.
It is true that if you live in a community with a Homeowners Association (HOA) like us, you also have certain constraints. But, in general, you are way more free owning your home than renting.
Owning your own home is a great way to make sure you and your family will always have a place to live. When renting, you never know whether or not your landlord will end up renewing your lease or end up renting your space to another tenant.
If you have your own home, you never have to worry about someone coming and kicking you out (provided you make all of your mortgage payments of course).
When it comes to feeling secure about having a roof under your head, owning beats renting.
10. They Want to Flip Them
Flipping houses has become a popular trend that involves buying old and run-down houses and turning them into brand-new homes. Some homes require much more TLC than others, but ultimately these projects demand a lot of attention. However, it is a great way to make money, especially if you purchased the home inexpensively and sold it again for more than you bought it.
Flipping a house takes a lot of work and dedication, on top of having the money upfront to pay for the renovations and the house itself. But if done properly, flipping a home (or two) can be incredibly profitable.
If you can sell a house with more than one separate living space, you may get more buyers interested to purchase.