When you are considering the reasons to buy vs rent a house, there is one reason that stands out. House hacking is an often-overlooked reason to buy a house that should be the top reason for anyone that is hoping to achieve financial independence.
With the power of house hacking, you can potentially eliminate your entire housing expense. That’s right! Someone else could be covering your entire mortgage cost. Want to make this a reality for your budget? Take advantage of our free House Hacking Quick Start Guide.
Let’s explore some of the major reasons why you should buy a home instead of rent.
Major Reasons Why You Should Buy a Home Instead of Rent
Here are the major reasons why buying a home wins the buy vs. rent debate.
Of course, buying a home is the right move if you have a strong financial foundation. Not sure if you are there yet? Explore our guide to building a financial foundation to find out if you are ready to jump into homeownership.
With that out of the way, here are the major reasons why you should buy a home instead of renting.
Opportunity to house hack
House hacking is an amazing way to build a strong financial future. With your housing costs completely eliminated, or at least minimized, house hacking can provide opportunities to use the newfound money in your budget to accelerate your progress towards your financial goals.
Since most Americans spend between 30 to 50 percent of their budget on housing costs, it is easy to see how these savings can add up quickly. Through house hacking, you can become a savvy homeowner that maximizes the utility of your property.
If you are thinking that you don’t want to live with roommates, that’s okay! There are several other ways to house hack without any roommates involved.
Through homeownership, you can tap into the ability to lower your housing costs for good. Imagine how you could repurpose that chunk of change. You might choose to invest in real estate or pursue a leapfrog house hacking strategy to really get the ball rolling on your financial independence goals.
Is house hacking the first step in your real estate investing journey? Learn how to dive into real estate investing as a beginner.
Stable housing cost
When you lock yourself into a long-term mortgage, you are also locking in a long-term housing cost. Although rent prices will likely increase each year, your mortgage will remain the same for many years to come.
With the help of a 30-year mortgage and affordable home choice, you can lock in a stable housing cost for the long-term. Even without house hacking, your budget will thank you for planning ahead.
As a homeowner, you can tap into tax savings opportunities that renters cannot. As a homeowner, you can deduct mortgage interest and property taxes from your federal income tax. Many states also allow for these deductions.
With that, you could potentially save thousands in taxes through homeownership. Not sure how to make this happen? Consult with a CPA to determine the best tax strategies for your finances.
If you are considering house hacking, you can take your homeownership tax savings even further. Learn how with Amanda Han in the House Hacking Podcast.
Each month you will likely have to cover a housing cost of some kind. Whether you rent or own a house, it could cost hundreds of dollars each month to keep a roof over your head.
Unlike rent, the housing payments you make towards a mortgage will go towards building equity in your name. Although part of your mortgage payment will go towards servicing your mortgage loan’s interest, another part will build equity that you can hold onto for the long-term.
The equity you build in a home can contribute to your long-term wealth-building plans. If you keep paying rent, the money you pay to a landlord each month doesn’t help you build long-term wealth.
If you own the home, it is absolutely yours! Although not all landlords are bad, it can be annoying to deal with a landlord as you move through life.
For example, let’s say you want to bring home a pet. In most apartments, you’ll have to get permission from the landlord and provide an upfront fee to bring your new pet home. If you own your own home, you won’t have to ask for anyone’s permission to make important life choices.
Beyond that, most people don’t enjoy being told what to do. With a landlord, they are in charge of the rental agreement and can make life inconvenient.
You don’t have to deal with any of that when you own your own home.
One reason to buy a home instead of rent a home is: house hacking
It is not surprising that my number one reason to own a home is house hacking. Although most people overlook this opportunity, it could help you build long-term wealth.
Plus, you can eliminate your monthly housing costs. When you look at your monthly budget, you’ll see exactly how much house hacking can save you!
The bottom line
House hacking is the best reason to buy a home. If you start house shopping with house hacking in mind, then you can look for the right situation for your lifestyle preferences.
While you can go the roommate-style house hacking route, there are several other ways to enjoy the benefits of house hacking without sharing any common areas with your tenant.
Ready to dive into house hacking? Take advantage of our free House Hacking Quick Start Guide.