Com_156_Persuasive_Essay

Owning a Home Is Better Than Renting COM 156 Owning a Home Is Better Than Renting Have you ever wished that the people living in the apartment directly above you would refrain from herding elephants through their entire apartment at 3:00 a.m.' Have you had the overwhelming desire to rip down that gaudy 1970s purple, yellow, and red paisley wallpaper from the bathroom walls, before you have had your morning coffee' Then perhaps it is time to consider an alternative option that relinquishes a virtual stranger of the decision making power, in an effort to avoid the great elephant migrations across the savanna in the apartment upstairs. Making monthly mortgage payments allows the owner many luxuries, which are often unavailable to a renter. When faced with the decision whether to rent or to buy their next home, many people struggle to consider all of the pros and cons of each to make the best decision possible. One argument against homeownership is that renting allows lower monthly payments. Although this may be true for the first few years, with a normal annual increase of only 5%, a renter will actually pay more than the average homeowner will, after only five years. (GinnieMae, n.d.). While initial rental costs average nearly the same as monthly mortgage payments, renting someone else's house does not allow the renter the same luxuries realized by the mortgage paying, homeowner. The benefits of maintaining a stable home in today’s economy, having the ability to make changes in and around the home, increased tax deductions, and building home equity, make owning a home a better option than renting. While renting may allow a person the freedom to move on short notice, having the stability that comes with owning provides many people with peace of mind, especially in today’s unsteady economy. Renters are often at the mercy of the property owners financial situation, and many renters find themselves displaced when the rented home or property goes into foreclosure, even when the renter is consistently making monthly rent payments to the property owner. A property owner is not required to give a tenant notice when the property is in foreclosure. (Department of Consumer Affairs, unknown) Someone who owns the home that he or she lives in does not have to worry about whether the property owner is current on the mortgage or not. As long as the homeowner continues to make the monthly mortgage payments, the home will continue to be available to the owner, and his or her family will not be forced to make last minute living arrangements. Although it may be easier and less expensive to call the property owner when home repairs are needed while renting, having the authority to make decisions about remodeling, landscaping, and having pets are not luxuries that renters may enjoy, as making these types of changes usually require the property owner’s prior approval. As a homeowner, the desire to add a skylight into the bathroom ceiling, or paint the kitchen a warm mocha color are not only achievable, but they do not require someone else’s prior knowledge or consent. Planting a tree in the front yard and watching it grow is a reward that can be enjoyed by generations, but when someone else owns the property, the individual or family who rents the home may not be afforded the luxury of making landscaping decisions around the home. Renters are also at the mercy of the property owner concerning the desire to have pets. Purchasing the home enables the owner to enjoy the companionship of a 100-pound German Shepard Dog, or to engage in hobbies centered on aquatic dwellers, that may not be permissible while renting. Another advantage of renting is it usually requires much less money up front; however, numerous tax deductions are available to homeowners, which are not available to a person that rents a house from someone else. As stated by Bajtelsmit and Rastelli (2008) “Although it usually costs more to buy than to rent equivalent space, homeowners generally experience long-term financial advantages from the growing value of their home and the tax deductibility of interest and property taxes” (p. 170). When on a person’s first or second home, the interest paid on a home loan, home equity loan, or home improvement loan is 100% tax deductible. Property taxes paid to state and local governments in addition to late payment charges and prepayment penalty fees are also tax deductible, whereas all fees and payments that are associated with renting are never tax deductible. Almost all home improvement costs are also tax deductible with good record keeping, detailed receipts, and a complete list of itemized deductions. Modernizing the kitchen or putting in a swimming pool can result in saving the homeowner money in the long term, (IRS, 2011). Using tax-deductible interest, property taxes, and home improvement expenses to reduce the amount of taxes owed each year will help the homebuyer save more money over time, than if that same person were to rent a comparable home for the same amount of time. Perhaps the greatest advantage of homeownership is the investment of home equity - the amassed money that a homeowner pays toward the principle amount on a home loan- that accumulates over time. Unlike paying rent monthly, making monthly mortgage payments builds equity that can be used in a variety of ways. Making monthly mortgage payments builds equity, which can be withdrawn and used when the homeowner needs large sums of money. For someone that has children, using accrued home equity is an option for paying children’s college expenses, paying unexpected medical costs, and even retirement. A person who owns his or her own home also has the option to access the accumulated home equity through a reverse annuity mortgage for a specific amount of time, or in some cases for the life of the owner. (Bajtelsmit & Rastelli, 2008) This income from accrued home equity can increase monthly income and create a more comfortable retirement lifestyle, another benefit of home equity that cannot be realized by someone who rents. The responsibility of owning a home is not without headaches and concerns; however, the benefits of owning are unmatched by the advantages of renting. Homeownership benefits society by enticing the average homeowner to engage in neighborhood activities and social events, which in turn provides children and teens more stability within the family dynamic, thus enhancing the children’s educational experience, personal relationships, and decision-making processes. As reported in a study titled “The Social Consequences of Homeownership,” author Robert Dietz quotes a 1982 sociological study by Claude Fischer on the effects of homeownership on children and families by saying, “it finds that homeowners are friendlier and more socially communicative with their neighbors than renters, and thus more likely to participate in collective causes.” This study further suggests that homeowners and children of homeowners tend to lead happier and healthier lifestyles than those children whose parents rent. These children are more likely to do well in school, continue on to college, refrain from teen pregnancy, and are less likely to suffer from behavioral issues. (Dietz, 2003) As a means to provide children with every possible chance to succeed in life, and to enhance the quality of adult lives, homeownership is the most beneficial option available today. Renting may be an option for some, but the financial advantages of increased tax deductions and accrued home equity, combined with the emotional advantages that come with having peace of mind and the ability to make executive decisions regarding the state of the home and property, make owning a home the best housing option available. References Bajtelsmit & Rastelli, V. L. (2008). Personal Finance- Managing your money and building wealth. In V. L. Bajtelsmit, & L. Rastelli, Personal Finance- Managing your money and building wealth (pp. 2-20). Hoboken: John Wiley & Sons INC. Department of ConsumerAffairs, L. A. (n.d.). Renters in Foreclosure. Retrieved October 19, 2011, from Los Angeles County, Department of Consumer Affairs: dca.lacounty.gov Dietz, R. D. (2003, June 18). Social Consequences Study: . Retrieved October 17, 2011, from Newton Community Development Corporation Community Land and Trust: www.newtowncdc.org/pdf/social_consequences_study.pdf Fischer, C. S. (1982). To Dwell Among Friends: Personal Networks in Town and City. Chicago: University of Chicago Press. GinnieMae. (unknown). Ginnie Mae. Retrieved Septmeber 17, 2011, from Ginnie Mae, Government Guaranteed: ginniemae.gov IRS. (2011). Publication 530. Retrieved September 15, 2001, from IRS: hhtp://www.irs.gov/publications/p530/ar02.html