The benefits of owning a home can be beneficial compared to renting a home or apartment because of lower monthly rates and the ability to create equity and eventually own a valuable asset like a home.
1. Home Insurance
A small percent of renters pay for renters insurance but with homeownership is mandatory insurance required to own the home. This payment is usually on a monthly basis and is an example of a fee that is seen with homeownership not common with renting.
2. Condominium Fee
If buying a home which is considered a condo, owners can see additional fees paid to maintain the home and the surrounding area. These fees are used to pay for lawn care, landscaping, snow removal, and common areas like gyms and pools. Not all homeowners will see this fee but it is one to consider if looking at condos.
3. Property Taxes
Property taxes are the largest change from renting to home ownership. Home owners will pay property taxes on their new home for the entire duration of their ownership. This amount can change as the home is worth more or less money over time. Other changes to the amount paid monthly can come from new bills passed around election times.
4. Fixes to the House
If items break and need repair in a home, owners will have to fix them or call and get them repaired themselves. With rentals, people can call a landlord or maintenance man and have the problem fixed normally for free. This luxury will be missed right away the first time something breaks on new homeowners.
5. Lawn Care/Snow Removal
With apartment complexes and most rental homes there is professional landscaping contracts with snow removal services and lawn care providers between companies and the rental unit. This means that renters could rest assured knowing that with each snowfall the sidewalk and parking lot would be clear in the morning. Home owners now have to either pay for these services or do it themselves.
6. Mortgage Interest
Another large cost associated with owning a home is the interest payments that will be placed on the monthly mortgage amounts. This is a small amount each month but over a fifteen or thirty year mortgage makes up a substantial amount paid by a homeowner. Renters of apartments or homes usually see their rates stay the same and do not pay interest on the amount.
7. Upfront Fees
The costs associated with buying a house are large initially. There are many upfront fees paid to the seller of the home as well as the bank and realtor. These amounts all add up and make for a large down payment on the home. Usually to rent a place one month security deposit is required but this amount is significantly lower than the amount that will have to be put down to buy a home.