I bought my first house with my husband a little over 10 years ago and at that time I was convinced that this was the right choice. In fact, I still think that, given our circumstances, owning a home makes more sense than renting it.
But one thing that has disappointed me over the years is that I have always expected home ownership to give me a sense of financial security. On the contrary, it actually had the opposite effect.
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As a homeowner, I understand and appreciate that the money I spend each month to pay mortgage helps me eventually become the owner of a valuable asset. By paying rent, you can spend years sending checks to the homeowner and you have nothing to show.
But my main problem with home ownership is that to some extent, you never own your home. Sure, you can get rid of your mortgage while you are alive, but there is another annoying waste called property tax that you are constantly on the hook as long as you own this property.
Where I live, property taxes are expensive – so much so that I spend more on taxes each month than on my mortgage payments. And property taxes also tend to rise over time, especially as home values rise.
For the record: I’m not going to own my current home after retirement, and I’m not sure if I will have a home at this stage in my life. But many people work hard to pay off their mortgages on time before retirement so they have less spending in their older years. The problem, however, is that if you live in a place with high property taxes, you will still spend a lot of money on housing, even if your home pays off.
Another problem I face with home ownership is that renovation costs can sneak up on you when you least expect it. My husband and I bought a newly built house just over ten years ago, and we have maintained it as we should. Regardless, we still face our fair share of costly home repairs, some of which suddenly reached many thousands of dollars.
Fortunately, we focus on building reliable emergency fund for situations like this. But since home renovations can come out of nowhere, being a homeowner doesn’t give me much peace of mind. If anything, this creates the opposite scenario. I often worry about potential household expenses to the point where I sometimes deprive myself of luxury items to instead increase our cash reserves in case something else breaks.
Be realistic about home ownership
At this point, you might be thinking, “Why doesn’t this woman just rent a house if she thinks that way about owning it?” But in fact I would like to. I actually think that renting would give me more peace of mind than owning a home, because in that case, I would know that my expenses are fixed, at least for the duration of any lease that I sign.
The problem, however, is that you can’t rent a bigger house in my wilderness – they just aren’t available. I could rent a smaller house, but that doesn’t work for my family. Also, since I have children, I need stability to stay in the same school district. If I rented out, the landlord might decide not to renew my lease, which would mean not only the move, but the removal of my children from school.
Thus, I prefer to own a home, although there are financial aspects that make me uncomfortable. I also want to make it clear that there are many the benefits of owning a home, including many tax breaks not available to tenants.
But in the end, owning a home doesn’t help me feel as financially secure as I would like. And the aforementioned pitfalls are something that every potential buyer should keep in mind before taking such a step.