Most people are raised with the notion that homeownership is a much more preferable alternative to renting. Many of the most vocal proponents of homeownership liken renting to throwing money away. Subsequently, young adults go to school and get a job with the singular goal of eventually buying a home. Few stop to think about whether or not homeownership is genuinely the best option. But is homeownership truly the “end-all, be-all” of becoming an adult? As it turns out, there are quite a few homeownership myths and misconceptions. And while owning a home isn’t something that you should disregard entirely, it is advisable to know what you are getting into before you make the commitment.
Here are some of the most pervasive myths about homeownership and the truth behind them:
Homeownership is always a better option
The oft-stated claim that homeownership spares you the cost of rent has a glimmer of truth to it. It is certainly true that you will no longer have to scrape together rent money at the end of the month after purchasing a home. Furthermore, buying NM Home Insurance provides a measure of protection that ensures your peace of mind.
You have to realize that there are other factors and expenses to consider. One of these is how long you foresee living in the home. It generally takes five years or more before you could offset the cost of buying and selling the property. If you don’t plan on living in that house for that long, renting is a more cost-effective option.
Owning is more expensive than renting a home
In some ways, owning a home is more expensive than renting it. Keep in mind that most repairs are your responsibility, and the costs can add up considerably over time. On the other hand, if you rent your home, it is usually the owner’s responsibility to pay for repairs. This is often the case if the part requiring repair breaks down due to natural causes.
Of course, there are other factors to consider, such as the size of the home and environmental issues. Smaller homes made of quality materials can be very low maintenance, so you may not have to spend too much on upkeep. That being the case, homeownership shouldn’t cost you much more than renting an apartment.
Homeownership is risk-free
Purchasing a home is generally considered a risk-free investment. This is true to some extent, as the value of most properties usually increases over time. But keep in mind that this isn’t always a sure thing. Property values can decrease as well, so there is a certain amount of risk involved when buying property. There may also be unforeseen problems with the property that may require costly repair or maintenance.
Economic factors could also cause the value of a home to drop significantly. The recession that occurred toward the end of the first decade of the millennium brought about widespread property devaluation. Subsequently, many homeowners owed more on their homes than they were worth on the market. Those forced to sell lost tens of thousands of dollars off the home’s original value, highlighting the risks involved in homeownership.
Renting saves you the costs of homeownership
Everyone that has purchased property knows of the costs involved in homeownership. Property taxes and homeowner’s insurance are only some of the most common expenses, and they can be considerable. But if you are thinking that renting a home is a way to avoid those expenses, you might want to reconsider your plans.
Although renters don’t pay those costs directly, many landlords factor them when deciding how much to charge for rent. Consequently, renters will be paying at least part of these costs.
Furthermore, it is still advisable to obtain renter’s insurance even if you opt for rental property. This may even be a requirement for certain types of properties. And although renter’s insurance doesn’t usually cost as much as homeowner’s insurance, it is still another expense that you will have to factor in.
As you can see, the question of whether homeownership is better than renting isn’t exactly straightforward. There are pros and cons to each option, and only you can decide which path is right for you. In any case, it is always a good idea to consider external factors and your circumstances before you commit to a decision.
About Daniels Insurance, Inc.
At Daniels Insurance, Inc., we have a unique understanding of the risks that businesses like yours face on a regular basis. With the backing of our comprehensive coverages and our dedication to customer service and quick claims resolution, your business will be fully protected. For more information, contact us today at (855) 565-7616.