Resourceful-Mom

Home Buying – Renting vs Owning

As with any decision, there are pros and cons.  So, it should be no surprise that this would be the case when deciding to purchase a home versus continuing to rent.  In addition, pros and cons vary based on the person assessing the situation. As an example, I am green thumb challenged so yard work does not interest me; however, if you love giving attention to your garden after work, you will disagree that yard work is a negative.

Please take this information as just that, information.  This is in no way meant to deter you from pursuing your dream of owning a home.  I am a homeowner and, in the event you haven’t researched, there are a multitude of single mothers that have decided to make home ownership a reality.  Even in this economy, it’s possible for you too.

I especially like this article written by Brandon Cornett of Home Buying Institute entitled “Home Buying for Single Moms”.  Aside from the fact that he has a ton of information on home buying, in this particular article,  he has referenced several success stories from all walks of life.

Since increased cost was my biggest concern when thinking about purchasing a home, I will address the the differences I have experienced from a cost standpoint.

As a renter, I recall the following:

• Household Repairs – The maintenance person handled the repair and/or replacement of anything that no longer functioned properly.
• Rent Increase – If the rent increase was more than I could afford, I could discuss my financial situation with the apartment manager and negotiate a lower increase.
• Utilities – My apartment was total electric so I was only responsible for electricity and water.  Depending on your apartment complex, you may be responsible for some or all of your utilities.
• Renter’s Insurance - Renter’s insurance was affordable.
• Yard Maintenance – The apartment complex handled the landscaping.

As a homeowner, my experience has been as follows:

• Tax Deductions – We’ll start with this one as it’s the one we hear about the most.  Owning a home does allow you to reduce your amount of taxable income.  From your standard deductions to deductions allowed for home improvements, you can save thousands.
• Household Repairs – I am responsible for all indoor/outdoor repairs and upgrades.  I can; however, change any room, wall or floor at anytime, depending on what my budget allows.
• Home Warranty – In an effort of minimize the financial stress of having to replace a large appliance, I have a home warranty. How the home warranty works is if my refrigerator, water heater or any other appliance goes on the blink, I would simply pay a service fee and, if the item cannot be fixed, it will be replaced.  For me, having a home warranty offers peace of mind.
• Mortgage Payment – Based on fluctuations in my homeowner’s insurance and taxes, my mortgage either increases or decreases yearly.  Many times, I don’t know how much my mortgage payment will increase until a month or so prior to the increase.  Some people, during closing, have opted to keep their insurance and taxes separate from their mortgage. For me, it has been easier to have them all in one payment.
• Utilities – As a homeowner, my utilities are not included in my mortgage.
• Yard Maintenance -  You guessed it, I’m responsible for maintaining my yard. When you’re a homeowner, it’s called curb appeal and, in some subdivisions, it is included in your association agreement.