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The Advantages and Disadvantages of Owning a Home

For many Australians, owning a home is as big as a dream come true, whilst for some, it can be a bit of a rough walk ahead. Undoubtedly, buying a home is one of the major financial moves you can make in your life. Amidst the uncertainties that the future holds and lifestyle changes that are about to happen, However, with careful planning you can easily overcome the negatives of the purchase and look forward to reaping the long-term benefits as an owner of a house.  Here are some of the pros and cons of owning a home.

The Advantages: It’s yours to Stay In, Forever

Australian rentals often get into short-term residential leases. Typically, these can be from 6-12 months depending on the type of tenancy. Constant relocation, financial and emotional burden can cause a lot of stress for the tenant as the tenancy expires. As opposed to renting, a homeowner is free to stay and make a long-term plan on the house. You have a larger sense of privacy, connection and stability that comes with a greater sense of belonging.

Let Your Creativity Flow

Unlike tenants, who constantly need to seek permission of their landlords for minor changes, home-owners are free to decorate and make necessary changes to their houses. A house becomes a home with a personal touch by adding in decorations, interiors and making changes. On the other hand, these improvements do increase its value and ability to resale. You may always find a good if you’re looking to get a good offer for your house.

Your Home Is One of the Largest Investments You Can Make

The initial stages of purchasing a house are a nightmare. There will be instances that house owners think that they made the biggest mistake with all the bills to be paid and bills that are anticipated.  Savings used as deposits, mortgages that are higher than rent itself, taxes add into the pressure. But still owning a home is the most effective way to grow investments as its value appreciates over time and eventually the costs are covered up for. Particularly in Australia real estate prices tend to grow faster and home owners are better off than renters.  Besides since mortgages are fixed-term rates, it’s easier to plan your finances beforehand.

Now what’s An Equity?

Homeowners accrue equity, which creates an opportunity to carry out expansions or changes to the current property. As the principal amount is paid off leaving only the interest gives you the equity paving way to redraw or refinance the loan. Equity is considered a significant benefit for some as it gives more potential for enhancing the property. Perhaps re-investing in a second property will add to the investment portfolio.  Any additional properties can be easily rented or leased out, so that the refinancing is paid for by the tenant.

The Disadvantages: It’s A Long-Term Financial Commitment

Amidst the planning and set mortgages, an unexpected situation may occur and a mortgage is a long-term commitment that has to be made and are higher than paying a rent. Down payments, closing costs and moving expenses are usually overseen but have to be incurred. Besides the main costs, maintenance cost may come from time to time. These can be minor fixes to major repairs that can be expensive.

Relocation Can Be Difficult

Owning a home ties its owners to a particular community or neighbourhood, which becomes part of their life. Sudden relocations may not come as easy as it sounds as leaving a comfort zone and readjusting takes time and resources.

Borrowing against the home equity can accumulate the owner’s debt which might compromise the lifestyle and other priorities.

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