Home Ownership and Rental Home

Obviously, those for whom the idea of owning a home represents an important goal will not receive that same satisfaction or gratification from renting property. Whereas net worth that is locked up in a home generally increases over time, there is absolutely no residual value to money used to pay rent on property. Homeowners (generally) pay off a mortgage on a monthly schedule but that money goes into the value of their capital investment in their home; money paid for rent is spent and gone. Over the course of a decade, a homeowner will typically have paid off and acquired ownership equity in approximately one-third of his home; a renter will have paid out approximately the same in rent over that time but retain no equity in return. Homeowners may also be able to use their home equity as collateral for loans to help them pursue other investments.

Home renters cannot do the same because they hold no ownership interest in the equity of the property.

On the other hand, not everybody necessarily wants to live in the same place for decades; they may have a lifestyle that requires them to live in different cities periodically or they may enjoy changes in locale or career or climate as a matter of preference. Home ownership would be an obstacle that limits freedom for people in either of those situations. Owning a home can also be more expensive and time consuming than renting property because the home owner is generally responsible for everything that the property requires. Renters are responsible only for their possessions and have the luxury of simply calling the landlord when something breaks or when contracted services must be paid for to maintain.

Leave a Reply

Your email address will not be published. Required fields are marked *