What is the homeowner’s advantage? The term refers to all of the pros that come along with owning a home. As a homeowner, you have certain privileges that renters don’t.
When you own a home, you won’t have to worry about keeping the property exactly how it was when you first moved in. There’s no dark cloud that hands over you because you painted your walls a fun color and now might not get that deposit back. You have a full range when it comes to changing things in your home.
These pros don’t come without cons, however. Just like with everything else in life, with the good comes the bad. You’ll have a lot more responsibilities and hurdles to overcome when deciding to be a homeowner.
Below is our guide on all of the not-so-easy things that come along with owning a home.
Maintenance Costs Are Yours
When you’re renting an apartment or renting a home, many of the maintenance costs fall into the hands of your landlord. Big things, small things, and everything in between is your landlord’s responsibility. You might be responsible for switching out burnt lightbulbs or replacing broken appliances that didn’t come with the apartment or home, but most of the maintenance costs aren’t yours.
When you own a home, you have to prepare yourself to be completely in charge of everything. Anything that can go wrong most likely will at some point in time. Nothing lasts forever and when your refrigerator stops working, it’s money out of your pocket.
Don’t forget about general upkeep as well. If you’re used to living in an apartment, then you never had to worry about landscaping. As a homeowner, you’ll need to mow the lawn, pull the weeds, trim the trees, and more.
Flexibility Is Low
As a renter, you typically sign a lease that’s valid for a certain amount of months usually ranging between 8-15, with 12 being the most common. When the lease is up, you have the free will to leave and move to another location.
Even if the lease isn’t up yet, you can still choose to move out and break the lease or continue paying the rent until the lease is up. When you own a home, you don’t have this option. Homeowners have less flexibility when it comes to relocating.
If you own a home, then you might need to find renters to rent it out after you move, or you’ll need to sell it. If you can’t make this happen before you need to move, then you’ll be paying two mortgages.
There are some great resources for homeowners online that you can check out if you’re looking to sell your house.
You Can Lose Money
Buying a house is an investment. It might be the biggest investment you ever make in your life. Although there’s plenty of potential to come out on top, keep in mind that you also take the risk of losing money. Take a look at the housing market trend in the area your home is in.
Is the neighborhood up and coming or quite the opposite? What’s the economy like? If you purchase a home now for a set price, will it be worth more or less 10 years from now?
What about 20 or 30 years from now? There’s always the risk of a house losing value over the years. That’s something you’ll need to research and think about before making a purchase.
Cost of Tax and Insurance
Remember, when you buy a home, you’re now responsible for the cost of tax and insurance on the home. You might have needed to pay renter’s insurance when renting in the past, but home insurance is mandatory, and depending on where the house is located, you might have to pay for different types of insurance as well, such as flood insurance.
Tax is another concern that homeowners have. You’ll need to pay taxes each time you make a payment to your lender. The payments will go into your escrow account.
When the time comes and your insurance and property taxes are due, the money will be taken out of this account to pay for it. Renters don’t have to be concerned about paying a property tax.
Payments Go Towards Interest
Equity won’t come quickly for most homeowners either. In general, the only way for equity to build quickly is if the property values in the neighborhood were to drastically skyrocket. Otherwise, equity is something that’ll come over time.
In the first few years as a homeowner, your mortgage payments will go towards paying off the interest on the house. Once you’re able to get the interest paid off, then you can begin to see an incline in the amount of equity.
Is There Really a Homeowners Advantage?
Homeowners’ advantage is a term that suggests homeowners have an advantage over renters. Is this term true? Sure!
There are several advantages that homeowners have over those you choose to rent houses. What you need to keep in mind, however, is that homeowners’ advantage doesn’t mean con-free. There are several disadvantages that homeowners will need to be aware of before they decide if purchasing a house is right for them.
As long as you know what to expect, you can prepare yourself for it and become an amazing homeowner!
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