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For potential first-time buyers in Chicago, many will be assessing the benefits of renting vs. buying to determine which is right for them. While this isn’t specific financial advice, we wanted to share some important advantages that go along with homeownership, some of which are often overlooked. There’s no doubt that Chicago is a beautiful place to live, so here’s why buying can be so beneficial:
This is probably the most significant benefit of homeownership and one that is often underestimated by first-time buyers. While your rent payments go directly to your landlord’s pocket, mortgage payments are an investment in an asset that you’ll one day own. If you pay the same amount each month renting and buying, imagine the different places you’ll be in twenty years. With renting, there is no return on that investment, while with buying, you may have nearly paid off your entire home. This is an important benefit for individuals to consider when making the decision between renting and buying.
Many renters believe they simply can’t afford to buy a home. And again, while this article isn’t intended to give specific financial advice, it may be worth investigating what homeownership would look like for you. The list price of a home is obviously going to seem massive in comparison to your monthly rent, and looking at the two is like comparing apples and oranges. To make a fair assessment, it’s important to look at how a mortgage and other homeownership expenses would break down monthly. This will give you a much better sense of how it compares to your current situation and help you determine if it’s feasible. Many potential buyers are often surprised to find that their mortgage payments are similar or even lower than their previous monthly rent payments.
Unlike in an apartment where you need to ask permission before making changes, when you own a home, you’re in charge. Want to experiment with a new paint color? Change the countertops? Update your cabinets? You get to create the home that you want to live in. And if you’re going to be making monthly payments either way, you might as well live somewhere you love.
This is one of the most common concerns I hear from potential first-time buyers. They don’t want to sacrifice their freedom. It’s important to recognize that buying a home doesn’t have to be a permanent decision that determines the rest of your life. Maybe you want to spend a year traveling, move to a different city for work, or upgrade to a bigger space. Owners have the options of subletting, renting, and, of course, selling their home to make the changes that make sense for them. While it’s important to consider your own situation as homeownership may mean a bit more commitment than renting, it certainly doesn't require you hand over your freedom.
We hope this has answered a few of the questions you might have over owning vs. renting in Chicago.