Why Buying a Home is Better Than Renting

Why Buying a Home is Better than Renting

Conventional wisdom used to state that buying a home is always a great investment. But after the housing crisis, many people who saw their equity sliced in half began questioning this logic.

That’s unfortunate. In most parts of the U.S., home buying is still a better decision than renting for people who plan to remain in the space for at least 4-5 years or more, both for financial and emotional reasons. Let’s explore some of these factors in-depth.

Price Security in Home Buying

Historically, prices tend to rise over time. For example, a loaf of bread, a gallon of milk, and a semester of college tuition cost more today than they did in 1990.

Your mortgage payment, however, is one constant you can rely upon. If you hold a fixed-rate mortgage, your monthly principle and interest (P&I) payment remains the same, regardless of how prices are moving in other industries. (Your property taxes and homeowners insurance may rise.)

Price consistency offers the advantage of planning for the long-term future. As a homeowner, you can anticipate your monthly housing costs in 5, 10 or 15 years.

As a renter, you can’t lock in this type of security. As prices climb, landlords raise the rent to meet the current market. In fact, some landlords write rent escalation clauses into their leases, systematically raising the rent annually.

If you’re renting with a month-to-month lease, your landlord may announce a price jump with only 30 to 60 days of advanced warning, depending on the laws in your area. This puts renters in the difficult position of needing to either find the additional funds or scramble to secure new housing with little advance warning.

Investment – Cash-on-Cash Return

As a homebuyer, the outlay of a small down payment can give you the opportunity to make outsized gains.

Hypothetically, for example, imagine that you put a 20 percent down payment on a $100,000 house. The price rises 5 percent, to $105,000. You would earn $5,000 on your initial outlay of $20,000 – a return of 25 percent. This is known as cash-on-cash return, and homeownership can make this type of gain accessible to the average person.

Forced Savings

A home can be a type of “forced savings.” Each month, a portion of your mortgage payment is returned to you in the form of equity. The longer you own your home, the more equity you build – both via mortgage payments as well as in potential value increases.

Renters don’t have this luxury. Many of the pro-rental arguments hinge on the assumption that money “saved” (either via lower monthly payments or through alternate uses of the down payment) would be invested in the stock market.

Realistically, though, what’s the likelihood that a renter would invest that money, rather than spend it on a trip to the Bahamas? And if that money were invested, what’s the likelihood that a renter wouldn’t panic during the next crash and sell at the bottom of the market, turning paper losses into actual losses?

A home functions as ‘forced savings,’ helping you build equity. Like a personal trainer, it keeps you accountable.

Flexibility with Home Improvements

As a homeowner, you can have the freedom to upgrade your home to your heart’s content – without carrying risk or ongoing financial commitment.

If you get a bonus at work, you can celebrate by installing hardwood floors or renovating the bathroom. If you suffer a financial setback, you can defer your plans to remodel the kitchen.

Renters don’t hold this flexibility. The only way they can upgrade their living space is by moving, and this entails both hassle and commitment.

Homeowners, by contrast, can upgrade their home piecemeal as they accumulate cash over the years. Home improvements are a one-time expense that doesn’t require continuous commitment.

Pride of Home Ownership

You wouldn’t invest hundreds of hours cultivating an exquisite garden in a rental property. You wouldn’t hang wallpaper or replace the light fixtures on a rental property.

As a homeowner, you can take pride in crafting, personalizing and perfecting your home. The space can truly morph into a reflection of you, in a way that a rental property never could.

Neighborhood Connection

As a homeowner, you’re more likely to become involved in your local community. There’s a stronger chance that you’ll join the neighborhood association, organize potlucks or block parties with your neighbors, coach a local sports league or volunteer at the local school.

While it’s possible that you’ll get involved with the community as a renter, you’ll also likely feel an emotional barrier that stems from knowing you might move in a year or two. Committing to an area for the long-term can inspire you to invest more time and energy into improving the neighborhood and connecting with the surrounding community.

Credit: Article published on coldwellbanker.com

Final Walk Through Tips



What To Expect During a Real Estate Walk Through (For Sellers and Buyers)


Guest Blog Post by Cara Ameer


One of the last pieces that a buyer does before going to closing is to “walk though” the house. What exactly is a walk through and what should happen?

A walk through is the last milestone prior to closing where a buyer visually inspects the property to ensure what they are buying is in substantially the same condition as when they first saw it, and to check on the completion of any negotiated repairs or replacements that were agreed upon to be made.

Everyone has come a long way from contract offer to acceptance, financing, inspections, getting through the appraisal and now one last check before documents are signed and keys are handed over.

Because it is one of the last things prior to closing, it can often be a rushed process as sellers are often hurriedly trying to vacate, etc. This part of the transaction is often the least prepared for and least coached about the proper way to leave a property upon move out:

So, let’s talk about seller and buyer do’s and don’ts:


TIME – Plan ahead and give yourself more time than you think. Plan to be moved out two to three days BEFORE the closing. This will give you some extra time for any last minute things that need to be taken care of. The process often takes longer than what you think.

EMPTY – The house should be completely empty when the buyers walk through. Buyers are expecting to see a totally VACANT house. Empty means empty –nothing lingering behind or in “a don’t know what to do with” pile.

CLEAN – Leave the home THOROUGHLY CLEAN and not just surface level clean. Make arrangements to have the home professionally cleaned once you move out. The buyers will appreciate it and it is one less thing you will have to take care of. This also means having carpets professionally taken care of as well. Don’t forget inside the cabinets and the oven – yes – buyers look inside of that during the walkthrough –even if you last used it a year ago! Things will be that more exposed in a vacant home setting.

UNWANTED ITEMS – Don’t leave unwanted items behind in the garage or attic – those areas seem to be a repository for things like old paint, doors, broken hoses, tires….. if you don’t want them, the buyer likely does not either. Make plans to dispose of these things well in advance of your moving day – especially anything deemed hazardous.

MANUALS – Put all manuals for appliances, controls, etc. in one drawer and gather all keys and remotes and have those in one package for the buyer. Label any keys and where they go – the buyer will appreciate knowing what goes to what doors –especially if all are different. It is also nice to leave a list of any particular instructions, details about the house, garbage collection day(s), etc. for the buyer. A vendor list also helpful to leave behind – even if buyer got your list in advance of the closing, being in transition will help to have important information easily accessible.

TRASH – This needs to be taken away BEFORE the walk through, not left behind for the new owner to deal with. Make arrangements to take to a neighbors or arrange for a special pick up if your closing date is between trash pick-up days.

DAMAGE- Move out damage – this can often create stress at the end when a buyer notices a gauge or ding. If something is damaged during move-out, promptly notify your agent so they can advise the buyer’s agent. Have a plan in place to get it repaired – this can often happen with movers and walls, floor scratches. Be sure to take care on surfaces like wood floors.

And one last thing… sometimes floors are faded when area rugs are picked up –be sure to check this BEFORE you put the house on the market 🙂

BUYERS – Stay flexible… this may not be a perfect process.

A walkthrough can be a rushed situation as it is right before closing and you have a ton of things going through your mind. Recommend having your original inspectors come back to check any inspection repairs that were made PRIOR to the walkthrough. It can be very difficult to check all repairs yourself, even if you have a receipt right before closing. Some items may be difficult to determine or may not be the most accessible. Leave this to the professionals that did the inspection in the first place. There is usually a charge for a reinspection but it is WELL worth it. Can’t put a price on eliminating doubt.

If incomplete repairs are found, have inspector document their findings and submit to the listing agent immediately to issue(s) can be rectified. Reputable contractors warrant their work and should not have an issue coming back out to address.

Don’t plan to start moving things in prior to closing – you legally don’t own the home and there could be issues with insurance coverage in case something happened between the time you placed your belongings in or on the property until the closing. While it may not seem a big deal to bring over “a few boxes” – this could create some potential liability issues if something went wrong. You may need some interim storage arrangements.

Arrange if time allows to meet with the sellers prior to closing so they can orient you with the home and go through how things work.

Cara Ameer is with Coldwell Banker Vanguard Realty in Pontre Vedra Beach, Florida

What To Expect During a Real Estate Walk Through (For Sellers and Buyers).