Five reasons why home ownership is better than renting
At the moment, we’re renting our home, but this definitely isn’t my ideal situation. I totally understand why many people rent – whether through choice or lack of other option. But for me, my ultimate goal is for us to own our own home again. We do own another property that we rent out and the rent we receive is paying off the mortgage on that property. So, when the time comes for us to buy our dream home, we already have a decent deposit sitting in our rental property. In my mind, there are a number of reasons why home ownership is preferable to renting.
Why home ownership is better than renting
We became accidental landlords about six years ago. At the time, myself and my husband were living in a two up, two down terraced house with our two children, then aged 5 and 3. That in itself wasn’t too bad. The bedrooms were spacious and we could have managed for a while longer. But, I was working as a self-employed childminder and my business was really starting to take off. Some days I would have six other children coming to the house and we started to struggle. On the days my husband was off we’d find ourselves fighting for space and he just didn’t have anywhere to go to relax. We lacked any decent outdoor space and the cracks were starting to appear.
One day, a friend told us that a house near her was coming up for rent. The house had three decent sized bedrooms and better still it had a separate playroom. It all kind of fell into place from there. The owner was happy for us to move in as quickly as we liked and our mortgage provider agreed to let us rent out our house.
We moved pretty quickly and we immediately felt the benefits of having more space. But at the same time we’d kept hold of our own house. Over the years we’ve had a really bumpy ride with tenants and other issues, but I know that we’ve made the right decision by keeping hold of that house and staying on the property ladder.
There are five reasons I think home ownership is preferable to renting.
1. Making money from property ownership
When you buy a house, you can be pretty confident that over the years your property will increase in value. Click here for SunLife to see how much money your house could have made you. Using this tool, I’ve calculated that our property has increased in value by a massive £60,500! Unfortunately, we won’t actually see the benefits of all of that because we did remortgage a few years ago – that’s something I really regret doing now. But we’re still in a great position when we do come to sell up!
Of course, you’ll need a lot of money upfront to make it work, whether in the form of a mortgage or just a bridging loan or similar, but the point is that there are all sorts of profits you can expect to find from other parts of the process of owning a house. And it’s going to be one of the best situations you can ever find yourself in.
2. Security
One of the things I hate about renting is that it never quite feels like home. It feels as though I just get lulled into a sense of home and it being our little haven, and then the landlord calls wanting to come and do his six monthly inspection. I completely understand why he needs to do that and we never stand in his way, but it does always feel like a kick in the teeth. When we lived in our own house, we did have more of a sense of it being OUR home.
3. Being mortgage free
People will often say that rent is dead money. I actually kind of disagree with this comment because money that keeps a roof over your head is pretty well spent in my opinion. But, I do understand where they’re coming from. When you pay a mortgage there’s an end in sight. OK, so the end may be 25 years away, but at the end of your mortgage term, you’ll own your home outright. When you’re permanently renting, there’s no such end in site and the thought of paying rent for the rest of my life does make me feel nervous! How would we afford that when we’re drawing our pensions?!
4. Equity
When you first step onto the property ladder, the chances are that you’re not buying your forever home. But, you’ve got a foot in the door and by paying off your mortgage you’re gradually building up equity which will then enable you to move up the ladder and buy your next home.
If you want the most secure form of equity, you’re better off buying a deed rather than an ordinary contract. A deed is essentially a proof of ownership, which makes it easier for you to sell your property later down the line. It also provides you with more robust legal protection, as you categorically prove that the property is yours, which makes it a more stable investment.
5. Freedom
Owning your own home gives you so many more options than renting. You are free to improve and extend your home (within the guidelines of the law) as much as you wish. You’re not answerable to anyone. OK so you can usually do some minor decorations when you’re renting, but then if your landlord decides to sell up, you’ve spent all that money for someone else’s benefit! You’re also free to have pets which is something our daughter is really missing whilst we’re in rented accommodation.
I totally appreciate that home ownership isn’t an option for everyone, it’s something we’re working towards again ourselves at the moment. But I do think that if you have to ability, then owning your own home has to be the better option long term.
*This is a collaborative post.
