My 10 Reasons You Should Be Buying a House Right Now!
There are certain issues in the world that will always incite debate. Abortion, politics, and whether or not college is a good investment are on the list, but those are debates for another day. The focus of this post is on an issue that is incredibly near and dear to my heart and that is owning a home.
A little background before we jump right in. I just recently closed on a home in a great area of my town. Very desirable neighborhood, near amenities, and within a short distance of everything I could ever need. I say this not to brag, but to be transparent and let you know that I am biased when it comes to homeownership.
Nobody wants to hear the reasons they made a bad decision. I certainly don’t, but I sincerely believe that purchasing my home was one of the best decisions I’ve ever made. Sure I’m still in the honeymoon phase of homeownership so ask me if I feel the same way in a year or two, but for now, I am happy with my decision and would never want to go back to renting.
Anyway, here goes the list in no particular order:
- Hey you’re no longer renting! – I’m sure this is probably a bit of a controversial jumping off point, but hear me out. There are many pros to renting, but there are tradeoffs both monetarily and psychologically. When you are renting, you aren’t building any wealth. Think of your rent money like you would any consumable good. You pay for it, use it, and have to buy it again when it runs out (at the end of the month in this case). When owning a home, you are still basically paying rent, but in this case you are making your money work for you. You are paying for an underlying asset with value. Sure the value of that asset can change, but you still have something backing your money.
- Pride of ownership – This goes along with the point above, but is more of a psychological benefit of owning a home. When you’re renting, you probably don’t keep things as clean or up to date as you should. Why would you? It’s not “your” house. When you own your home, it’s all yours. All the responsibility is on you to take care of things and keep things up to date. How many of you renters out there forget to water the lawn for a longer time than you should? I know I certainly did. “I’ll get to it tomorrow” I would say. Not so with owning a home. That lawn is yours and if you don’t take care of it, nobody will. The same holds true for every aspect of a home. Owning a home immediately puts social pressure to keep up with things.
- Security and Stability – Who’s to say that your landlord won’t give you your 30-day notice in the next couple days? It’s a real possibility. Nobody can do that if you own your own home. Sure if you miss a few payments the bank can come after you, but depending on your state, the foreclosure timeline could be six months to a year before you’re kicked out. And if you miss payments, you probably shouldn’t have been buying a house in the first place. I’ve been given my 30-day notice as a renter and it is scary. It is a panic inducing event. Where am I going to go? How am I going to find a new place so quickly? What have I done to deserve this? None of this happens if you own your own home.
- Investment – I’m always cautious to use the term investment when it comes to purchasing a home you plan to occupy. That shouldn’t be the reason you purchase a home. Homes are meant for living in. That being said, it’s hard to ignore the fact that real estate is an investment regardless of how you look at it. Your home is an asset that can change in value. Could it go up? Yes. Could it go down? Absolutely. Is one scenario more likely than the other? Depends who you ask. Either way, you’re acquiring an asset that you didn’t have before and are afforded the opportunity to live in that asset. It’s one of the few assets that gives you tangible benefits day in and day out. Bottom line: don’t buy your home only as an investment, but understand that it is and that there are risks associated with that. Do the work up front to ensure a smart investment, just as you would any other asset.
- Freedom and Independence – I know that inevitably I will get the comment of “how are you free if you’re tied down to a specific place?” To which I say that I am tied down either way. There are countless other aspects of my life that keep me in the town that I am in. My housing situation is simply a piece of the puzzle. An important one, don’t get me wrong, but a piece nonetheless. As a renter, there were things I was simply not allowed to do to the property. As an owner, my home is my oyster. If I want to paint or install something new, I am more than allowed to. Nobody will be able to say I can’t (barring an HOA or the government in the case of necessary permits or what have you). Have I run into that just yet? No, I can’t say I have, but having the freedom to do so is a nice bonus.
- Future Income – I’ll let you in on a bit of a secret here: I don’t plan on living in this house forever. I’ll probably live here for a few years and either outgrow it or another aspect of my life will change to where this home is not a viable residence anymore. What will I do at that point? Well there are a few different options. I can simply sell my house (hopefully with a bit of a profit) and use the equity to buy another home somewhere else. I could also rent out my current place and have that at least cover the costs of owning the home. I can then use the money I’m not paying towards my mortgage on either a renting until I find a new place to buy or as my mortgage payment on a new home. Personally, this second option sounds much better to me. The idea is to chain these properties until there is enough money coming in to cover all of my expenses and then some. You can’t do that if you’re renting!
- Predictability – In my case, I have a fixed rate mortgage. Basically, this means that the only part of my payments that can change are the property taxes and my own homeowner’s insurance. Taxes I don’t have much control over so I understand criticism there, but insurance I can change and shop for if I feel the need to. My principal and interest payments cannot change unless I refinance. Those are aspects of my budget that I can plan for and set aside to pay. Not only is this easier to keep track of, but it also affords me the option of paying off a little extra if I come into some unexpected cash. Remember, you will rarely find pre-payment penalties on mortgage loans these days, but check your own terms before doing anything.
- You can probably keep your monthly payment around the same as your rent payment – With the way the mortgage guidelines are currently set up, you can likely find a way to keep your total payment about the same when you change from paying rent to paying a mortgage. There are plenty of rent-vs-own calculators out there so a quick Google search will net you the necessary numbers, but it’s likely that you will find a comparable home to the one you’re renting for relatively similar prices. The math doesn’t need to be complicated. Just find what you can qualify for keeping your monthly payment the same and look from there. It’s really quite simple if you don’t let people complicate it for you.
- Right now might be the best time to buy in history! – Interest rates are at the lowest they have ever been in history (alright I get it, I’m sure there was a time with lower interest rates, but not recently!). Couple these low interest rates with the fact that you can put as little as 3% down on a home and you have arguably the most affordable time in recent memory. Now remember, interest rate is not the only thing you should be looking for, there are other fees associated with the home buying process so get all your information before making a decision, but with regulations requiring companies to disclose their APR (Annual Percentage Rate) it has become much easier to compare companies accordingly. Either way, there is no denying the fact that right now is a great time to buy due to low interest rates and low necessary down payments. Rent prices are increasing while interest rates are dropping. Get in now before the market passes you by.
- Housewarming Parties! – Just kidding… kind of. Do not buy a house just to have a housewarming party. It’s more of a cherry on top when it comes to these, but they are a great way to show off all of your hard work of buying a home and they’re a great way to get some cool stuff from friends. Just make sure you avoid drink spillage at all costs!
Well there you have it. Ten reasons to buy a home. While I’m sure there will be plenty of debate about the validity of many of my points, I personally love the homeowner lifestyle. It’s definitely hard work, but has added so much value to my life. I have a newfound sense of accomplishment and an added perspective I never imagined before.
Full disclosure: I am a mortgage broker so I have a bit of a leg up when it comes to this sort of thing, because well it’s my job, but I wrote this post to hopefully educate people out there about the benefits to owning a home. I am only licensed in one state so it’s unlikely that this could be considered a sales pitch, but I am more than happy to answer any questions you all may have.
I hope you all enjoyed this and I look forward to seeing ample discussion in the comments below!
I kindly disagree and here are some considerations:
You don't have to take my word. It's only natural there are pro's and cons. Either way, I advice you to watch this video by Khan Academy.
Here are my responses to your points.
Brandon, I found you as a fellow "Choose Youself" FB group member. I agrew with your reasons and have gotten into a home within the last 2 years. The upsides you mention are true and the disagreements against it are respectively true depending on your perspective, goals, and purposes in the process.
Instead of a simple dichotomy of "Home ownership is good" or "home ownership is bad", I would encourage people to find the option that best suits their situation, desires and future plans. I would guess that is why you consider buying a home as "choosing yourself" against the advice and counsel of James Altucher.
Thanks for sharing your story and I look forward to reading more from you and hope you enjoy your house!
I couldn't agree more with your idea of working against the dichotomy. Nobody's situation is going to be the exact same. If your situation fits into a space in which owning a home is the best option, then by all means do it. I'm of the opinion that more people are in the situation where owning a home would be better than renting than many believe.
Thank you @strangerarray for the encouragement. Hope you enjoy your house as well!
@brandonp I'm all for your article. I own a couple rental condos (which is an additional ball of wax..lol) but as long as the numbers work and I'm seeing cashflow after all expenses it always makes a good investment! I've put up a couple posts on steemit in regard to real estate investing. More to come!
@strangerarray I'm on facebook just enough to have been able to sign up to steemit. I may actually have to get involved to see this "Choose Youself" group. All for meeting even more like minded folks!
Feels good to read this, because we're doing exactly this for almost exactly these reasons. :)
I completely agree with you on homeownership, but me personally I would not move so a semi or already established area (a bubble). I would want to move to a small area right before its bubble is created. I am basing this off of your quote: "Very desirable neighborhood, near amenities, and within a short distance of everything I could ever need."