Disadvantages of Home Ownership

Owning a home is not for everyone. It is a big responsibility and a huge burden. For some, it is a lifelong dream and for others the idea is scary. Some people would rather rent because the responsibility for maintaining the home falls on others. Some rent because they think that home ownership is beyond their means. Whatever your situation, knowing both sides of the situation allows you to make an informed decision. Knowing the disadvantages of the process before you go into can help you make your decision easier. Owning your own home has many advantages but it also comes with a lot of disadvantages.

Monthly Costs

Often the monthly cost of owning a home is higher than what you were paying in rent. In some rentals, your monthly rent also includes some or all of your utilities. When you are buying your own home you will be paying all of your utilities and even some you weren’t used to paying when you were renting. Your monthly house payment often include homeowners insurance and property taxes that are put in an escrow account to be paid by the lender holding your mortgage when they are due. All of these combined often equal more than your rent. In some communities, however, owning a home costs less than rent. And you are building equity in the process so that at the end of the life of the loan, you own the property you are making monthly payments on.

Maintenance and Repairs

When you rent any repairs that are needed are paid for by the landlord. When you own your home, you have to make those repairs by yourself or pay someone else to do it. You have to quickly repair small problems to prevent future costlier problems from happening. Repairing a loose shingle is much better than replacing a whole roof. It is much cheaper, too. Neglecting small problems generally leads to much bigger problems that quickly become outside your area of expertise to fix.

Decreased Mobility

When you own your home, you cannot just pick up and go unless you sell or rent your house. Depending on the market, selling your house can take several months. If you simply stop making your mortgage payments, the lender may begin foreclosure proceedings and force the sale of your house. If this happens, you lose your down payment, any grant assistance you may have received and all of the equity you have built up. Your credit rating will also suffer for up to seven years thereby hurting any future efforts to obtain credit financing during that time.

Fewer Features

Some apartments have pools and laundry facilities. Some luxury complexes have playgrounds and state of the art gyms. You receive the use of these services as part of your rent. When you buy your own home, while you may certainly have a laundry area, chances are that you will lose the gym, playground and pool unless you buy a condominium, a co-op or are willing to pay a higher price.

No Guarantees

There is no guarantee that your house will increase in value. Changes in the market, the wear and tear on your property and a host of other factors can cause the value of your home to decrease. If you sell your house before the loan is paid off and your home has depreciated in value, you will be responsible for the balance owed. If you are planning to stay in the home this is not as big a factor because even though the home has declined in value to the lender, it is still of great value to you as your home.

In the end, it is up to you as the potential buyer to look at the pros and cons, the advantages and the disadvantages before making the decision to purchase a home. It is a lot of responsibility but it can provide you and your family with a home base for years to come.

Carl Schmidt writes about real estate and other topics to help you make the most of your money. For clarity he uses the world's best grammar checker.