Owning vs Renting, Why Owning Your Home is the Best Investment

It’s one of the most hotly debated issues in property: should you buy or rent?

Americans have always had a love affair with bricks and mortar. It is still considered the great American dream, with many believing it to be the ultimate expression of success and security. One of the main reasons people buy is because it’s an investment in their family’s future – they can use it to fund their retirement or they can pass it on to their children.

Renting, on the other hand, gives you the freedom to move on short notice if you get a new job in a new city or if you want to go on an extended holiday. You are also not responsible for home maintenance. However, you still need the landlords’ permission to hang a picture or buy a pet. Even turning up the volume on your CD player is out of your control. Fundamentally, the home is never really yours.

Here are some of the advantages of buying vs renting:

Sense of permanency and security. Buying a home enables you to make it your castle. Unlike a rental, buying your own home enables you to put down roots, staking a strong claim in your community.

Investing in an asset. Homes are a good investment because they appreciate over the years and provide long-term financial gain. House prices have risen on average by 3 per cent per annum since the early 1970s, and by six per cent per annum since the 1990s.* Another benefit of paying off a mortgage is that it is essentially a self-imposed savings plan. Buying a home is not considered ‘money down the drain’ like renting – every payment you make is equity in your own home.

Decorate the way you want. Home ownership gives you the freedom to decorate your home however you wish. There’s no need to worry about acquiring permission from the body corporate or the landlord, it’s yours to do with as you please. There’s nothing better than knowing you can paint your walls or build an alfresco, just because you can!

Retirement nest egg. For many people, the family home is an investment that will be used to fund their retirement. Some will choose to keep it as long as possible, while others will downsize and use the savings to build an investment portfolio.

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