Home Ownership - Is it Worth It?

Renting an apartment or a house works well for young people fresh out of college, just beginning to establish themselves in life.  But there are many disadvantages of renting-and we won't even count the fact that you're throwing your money away!  If you've been out in the work force for a while, it's time to take a look at buying.

People who rent have no tax advantages. When you buy a home, there are many tax credits for which you become eligible. They include a deduction for your mortgage interest, the sales tax when you buy or improve your home, and energy credits. The property taxes you pay to your state and local municipalities are also deductible. These days, the government has created stimulus credits that put money in first-time homeowners' pockets. If you're still renting, you're not taking advantage of any of these.

People who rent never know when the rent will change. Well, actually you do know: You can count on it going up every time your lease renews. With these tough economic times, there are few landlords who can resist cost-of-living increases in rents they charge. If you own a home, as long as you choose a fixed-rate mortgage, your payments will remain pretty stable. They might fluctuate a tiny bit from year to year if tax levies are passed or if your homeowner's insurance goes up. But basically, you're looking at a stable amount.

People who rent never have control over changes in their homes. What if you want to paint the kitchen in a bright, kicky color scheme, but the landlord says stick to white? What if you know you could really improve the logistics of the place by knocking out a wall, or widening a doorway between two rooms? Again, you have no real say over it. Some landlords have been known to fuss over too many pictures being hung on the walls. The truth is, if you're paying to live there, you should feel that you can stamp it with your own personality.

People who rent never build up any equity. This goes beyond the fact that you will just end up with a drawer full of payment coupons while your landlord reaps all the tax advantages of ownership. This also includes any efforts you put into increasing the livability or value of the place. What if you really want a garbage disposal in the kitchen sink? What if you buy some rose bushes to plant in the yard? Maybe the landlord will approve, but you know you won't be taking it with you when you leave.

People who rent cannot make decisions about how they live. There are too many rules! No pets. No overnight guests. Your kids must be quiet. No pool. Only one car, park it in the driveway, and guess what-you never get to use the garage. And you can be assured that however you do live will be discussed by your landlord with every neighbor he knows on the street.

The truth is that none of these reasons bothers young people who are just leaving the nest.  They couldn't care less about equity or home improvements or tax advantages.  What does it mean if you are becoming concerned with these issues?  It means you have reached a level of maturity and commitment, or a level of financial security, so that you are ready to take the step toward home ownership.

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