The other day I released my first manual on deciding if you should buy or rent a home post-college . Why the need for this? I feel that young professionals are often misguided when it comes to the idea of home ownership. There are too many myths that exist when it comes to both renting and owning. Owning is often viewed as the best investment you can make. On the other hand, renting is seen as “throwing money away.” I put up a bunch of guest posts this week on the decision to see if you should buy a home or rent one in your 20s. Today I wanted to take the side of home ownership.
Let’s look at when buying a home is a better option over choosing to rent a place out:
You plan on settling down.
If you’re ready to settle down with your career and with life, a home can give you the stability that you need. Renting provides a great sense of flexibility. If you want flexibility, then renting is probably in your best interest. When you’re ready to settle down, a home purchase can help you get grounded. If you’ve found work in the career/company of your choice, you also might be ready to settle down. There are many instances where you can find yourself planning to settle down. I recommend a first home purchase at this point.
You’re starting a family.
This is the most common instance where we find ourselves settling down. For those of you with a baby on the way or looking to start a family in the short term future, you may want to purchase a home in a community where you would want to raise your kids. Right before I was born, my parents purchased the home that I lived in for 22 years. Starting a family can be the perfect excuse to look into that spacey home in that calm community.
You know where you want to live.
The problem with many young professionals is that a primary residence is often viewed as an investment. The problem with this thinking is that real estate is not the greatest investment. Aside from all of the taxes and expenses that go along with home ownership, you still need to hope that your home appreciates in value. You must also factor in the rate of inflation. Buying a home for the sake of a “great investment” isn’t the best option. If you want to settle down and you know exactly where you want to live for the long term future, you’re ready to buy your first home.
Looking for responsibility.
As strange as it sounds, many of us young people find it a challenge to save money for no reason. Saving money without an end goal can get either really boring or you might just spend the money on random purchases that come up along the way. I don’t want to say that a home is a “forced savings tool,” but it’s a great reason for many of us to start saving up money.
A certain sense of pride comes along with owning your own place. You’ll find yourself taking pride in the presentation of your place and the responsibility that goes along with maintaining a home. Buying your own place can fill that gap that you feel as a 20-something living at home with no real responsibilities.
You plan on renting out space.
I’ve noticed that a few acquaintances have bought a home so that they can rent out a portion of the space while building their equity. The idea here is that you own the place, live in one of the units, and rent out the rest of the place. I see this as a great opportunity for a young couple looking to get their life started. You purchase a home and get a taste of life as a landlord in case you ever planning on buying a rental property.
Those are the instances that I could think of where you would be better off owning a home instead of renting one out. Did I miss any other times when you’re better off with owning? Please share with us.
(photo credit: owlhere )Google+