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For Chicago residents looking to make the leap from renting to owning, there’s a lot to consider. For many individuals, buying has some serious advantages over renting, though it also comes with its unique challenges. If you’ve considered your lifestyle and finances and are preparing to make the switch from renter to owner, here are some of the things to expect:
This is a main motivation for many first-time buyers who don’t want to be at the mercy of their landlord when it comes to rent. Landlords can hike the rent, making tenants need to readjust their finances or find another rental. This can leave renters feeling a bit unstable in their living situation, knowing that it could change anytime. It can make it challenging to plan for the future when you’re not sure if you’ll need to pay more or move. When you become a homeowner, much of that instability is gone. You’ve made the purchase and chosen a loan that makes sense for you. Especially if you go with a fixed-rate mortgage, you’ll have the comfort of knowing exactly what your payments will be throughout the length of your loan.
When you make the switch to homeowner, you’ll gain a new level of freedom over your property. Whether it’s something simple like changing the paint color or a larger project like knocking down a wall, you have the final say. The freedom to personalize your space is a great feeling for new homeowners. It really makes the space feel like your own when you can set it up to match your specific tastes and lifestyle.
This change can cause some potential buyers to hesitate. When you own a home, there’s no landlord to call if the washer breaks or if you find a leak in the bathroom. There’s also no landlord to pay the bill for the repairs. When you’re a homeowner, you need to be prepared for these unexpected expenses that pop up from time to time. This shouldn’t be a reason not to make the transition to owner, though. It just requires some additional preparation on your part. As a homeowner, you’ll want to work to build a strong emergency fund from which you can pull when you need to cover those expenses. Being a homeowner requires a new level of responsibility. This can be empowering for many owners, and as long as you prepare, it doesn’t need to be an intimidating prospect.
Being a homeowner also opens up the potential for different savings options. The most basic of these includes tax benefits like mortgage interest deductions. You’ll want to make sure you’re aware of how being an owner will impact your taxes and work with your tax advisor to identify any ways you can save. Depending on the property you buy and your individual situation, renting may be an option. Perhaps you buy a two-family house, or maybe you just rent out a room. For many homeowners, this can be a great strategy to save some extra money. Finally, unlike a rent payment which is just money out of your pocket, a mortgage payment is an investment in your future. Building home equity is one of the most compelling reasons to switch from renter to owner.
Finally, homeownership can be a great opportunity to become a long-lasting part of a community. While renting can often feel transient, purchasing a home can feel like putting down roots. You can get to know your neighbors and engage in your area as more than a temporary renter.
Making the switch from renter to buyer can be an exciting transition as well as a new level of responsibility. For those ready to buy in Chicago, it’s wise to consider what this change will mean for them. Have you already taken the leap? Which were the biggest adjustments you faced? Share them with us.