Whether or not to buy your own home is arguably one of the greatest financial dilemmas that young Australians face.
Etched in the Australian mentality for decades, owning your own home as a form of investment has been considered the quintessential “Australian dream”.
The age-old argument of which is better owning a home or renting a house comes up more
often than not.
Some people view the ability to own a home as the most significant achievement there is while there are individuals that do not see the need to own a home in today’s fast-paced world.
Below are some of the pros and cons of home ownership.
Pros of Home Ownership
Homeownership might just be the pinnacle of personal achievement for millions of Australians. The most popular pros of home ownership include;
Your home is a major asset: For millions of Australians, their home is their single most significant and most secure asset.
This is arguably the greatest reason why a lot of Australians are adamant about owning a home.
Your home is an appreciating asset: Before purchasing a home, it’s vital for you to carry out extensive research about the location of the home you are considering buying.
If you are buying a home in an emerging neighbourhood or city, there’s a high probability that the market value of your home will increase over time.
Home ownership is a form of enforced savings.
The truth is that very few people can come up with the money needed to purchase a home beforehand, so most people have to turn to mortgages to be able to finance their homes.
Mortgages become sort of enforced savings with substantial interests. Mortgage payments will force you to delegate a certain percentage of your income towards your home.
Home ownership gives you peace of mind: The fact that you own a home means that you’re your own boss and you are no longer subject to the rules and regulations of a landlord. All things being equal, nobody can evict you from your home.
Even if the government needs to make use of your house or the land on which it is situated, you can rest assured that you’ll be compensated handsomely.
Homeowners that fulfil all their financial obligations towards their lenders can live the rest of their life knowing that they are fully covered.
Cons of Home Ownership
More and more Australians are opting out of the option to become homeowners for reasons
best known to them. A few of these reasons include:
Your money is tied up: Most mortgages require you to deposit a certain percentage of the total amount of the house upfront, usually 10% of the total amount of your proposed home.
This can result in you parting with of tens of thousands of dollars or in extreme cases, millions of dollars.
You are geographically fixed: Homeownership keeps you fixed to a particular city, neighbourhood, or country.
As great as home ownership is, it can restrict you from moving freely. When you purchase a home, you are restricted to career opportunities within your particular geographical area.
No Investment risks: It is easier to enter and exit a lease than it is to sell your home. Renters are less likely to be saddled with the risks associated with the investment when compared with homeowners.
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