10 Reasons to Buy a House Other Than for the Investment

Posted on April 8th, 2021
10 Reasons to Buy a House Other Than for the Investment

There are a lot of good reasons to buy a house, and probably a lot of bad ones too.

But all too often, folks seem to get fixated on the investment side of things above all else, as if they’re playing the stock market.

This is especially true at the moment, with home prices up substantially since the housing crisis that look place about a decade ago.

Simply put, people don’t want to overpay or buy a home at the top of the market, especially with bidding wars all too common again. And that’s a fair concern.

The thing is, a house isn’t just an investment, if it’s even an investment at all.

It’s shelter if you plan on residing in it. A roof over your head to keep the rain and the cold out.

It’s a safe place where you can put down roots and create a foundation, maybe start a family.

So when you consider that pros and cons of buying a house list, you need to think outside the box as well.

You shouldn’t simply consider current home prices, or attempt to time the market to determine that right time to buy.

Homeownership is much more than that, though I do recognize everyone wants to get a good deal, whether buying a new pair of shoes or real estate.

That being said, let’s look at some reasons why buying a home can be about much more than the investment.

1. Stay as long as you pay

For me, this is a biggie. When you rent, you’re at the mercy of your landlord. You own nothing.

Once your lease comes to an end, they may decide to sell the property, rent it to someone else, or simply move into it themselves.

The takeaway is that when you rent, you don’t have any sort of stability outside the duration of your lease. If you want to put down roots, or call the shots, renting won’t get it done.

This can be very important for you and your children, assuming you have or want some.

2. You can lock in the price

Another huge factor in buying a home is the ability to lock in your price.

By that, I mean your monthly housing payment, which won’t change, even if home prices rise substantially over time.

Sure, there could be some fluctuation with insurance and property taxes, but if you take out a fixed-rate mortgage, you can pay the same basic amount for the life of the loan.

If you rent, you might see your monthly rent increase annually, depending on what the landlord decides and/or if you’re subject to rent control. Either way, there’s not much certainty.

3. Inflation hedge

Speaking of rising rents, real estate can be a great inflation hedge because you can keep paying the same amount you paid a decade ago while renters deal with the diminishing value of the dollar over time.

For example, your hypothetical $1,500 mortgage payment today probably won’t feel like so much in the year 2032.

Meanwhile, a renter might have to grapple with increasing rents based on the lower value of the dollar over time.

At the same time, your home’s value will likely rise over time simply due to inflation, so it’s potentially a better place to stash your cash than a bank account or elsewhere.

4. Forced savings

Another financial plus to homeownership is the concept of forced savings.

Each month, a portion of your mortgage payment goes toward the principal balance of your loan, assuming you have a mortgage (and a fully-amortizing one).

This essentially forces you to set aside a certain amount of money each month for the entire loan term, or until you sell and move on.

If you’re not a great saver, or a terrible one like most Americans, a mortgage can require you to save, whether you like it or not.

And when it comes time to sell, all those months of savings will represent your home equity.

To put it in perspective, the average homeowner has a net worth of around $255,000 versus a mere $6,000 for the typical renter, mostly due to equity.

5. To be close to work or school

You’ve heard the old location, location, location line. It’s true for property values, but also true if you want to be in a certain school district, or close to work.

If you can cut down your commute and/or situate yourself in an excellent school district, the value is essentially immeasurable.

The same goes for being close to family, friends, or in a certain community that resonates with you for whatever reason.

6. More living space for a family

Here’s another mega-important reason to buy a home – the space. If you plan on starting a family, or are already in the midst of it, a home can be a great asset for your sanity.

The unexpected COVID-19 pandemic highlighted the importance of personal space, whether it was the need for a home office or simply an outdoor area to find some peace.

It’s not a coincidence that condo listings constantly have a nursery in them. The new parents got the message fast and realized it was time to move out and buy a home instead.

Sure, you can rent a home too, but as I said earlier, that won’t provide stability, which is probably the last thing you want with little ones running around in diapers.

7. Backyards are nice

Aside from those extra bedrooms, it’s also nice to have an outdoor space that you can call your own. Maybe even a pool and a spa that you can relax in, weather permitting.

That space will also come in handy if/when you have kids, giving them room to explore and an excuse to put down the iPad.

The same is true for pet owners – I wrote a while back that Millennials were buying homes to give their dogs more space. And it’s hard to argue with them, as silly as it might seem.

Living in an apartment with a dog can be a hassle, not to mention a bummer for the dog. And you may not even be able to have one, depending on the HOA rules.

8. You can make it yours

There’s also the freedom of design you get with your own home. When it’s yours, truly yours, you can do whatever you want with it.

You can repaint it, tear down (non-load bearing) walls, renovate bathrooms and kitchens, landscape, etc., etc. The possibilities are endless, really.

When you rent, you might get to do some things, but even if you are able to do them, it’s not really yours.

You’ve either improved your landlord’s property (lucky them) or simply made a temporarily better space for yourself.

9. Pride of ownership

Along those same lines, there’s a pride of ownership associated with owning a home. It feels good to own as opposed to rent. It’s an accomplishment.

You’re the boss and you can reflect on your hard work as you relax in your property.

The American Dream typically includes buying your first home, and that will probably never change.

Owning a piece of land can be very fulfilling, as can having an active role in your community as a homeowner.

10. Something to pass along

Lastly, owning a home means you have something to pass along in the future.

Many homeowners grow to love their properties, so much so that they insist that they stay in the family.

It would certainly be nice to have something to show for all your blood, sweat, and tears over the years. And even sweeter to be able to take care of those you love after the fact.

If you rent, you simply walk away at the end with nothing. If you own, you wind up with something of value that can be shared.

Ultimately, all of the reasons mentioned are investments in their own right, even if not strictly monetary.

Take the time to consider them when you ponder homeownership and don’t get too caught up in trying to time the market or make a quick buck.

Read more: Buying a Home in 2021? 11 Tips to Get It Done!

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