Why buy a home over renting- Educate our children so they can buy their house.

Educate our children so they can buy their first house.

Why buy a home over renting? There are a lot of advantages in buying your home over renting, one being you are paying off your own mortgage instead of someone else’s. You can renovate or change something you don’t like about your house, where, if your renting you cannot. No inspections, someone going through your house and telling you, that you cannot use the garage as a storage space.

Yes, the downside is you need to save for a deposit but if parents are encouraging our young ones to save for the future, this would set up the adults of the future nicely. The reward at the end of buying your house is great and while renting is wasted money at the end of the day. At the end of a mortgage, you have an asset you can sell. Want to open your child’s first bank account? Find your local kiwi bank.

My dad never encouraged me to save for a deposit, although he bought a house early 20s. My husband and I, started a house deposit fund for our daughter when she was born. We get her to put a percentage of her pocket money to that fund every week and we also put money to it each week. How we explained it to our daughter is, when she buys her house, she can rent out a room to help pay off her house, or she can just spend the money. By saving now, it will give her more freedom when she’s older.

My dad gave my husband and I our deposit for our first house, which was so kind and we appreciate that every single day. Now, not everyone can do that and a long-term lesson is to save with your child, to show them their hard work pays off. Dedication will lead to success, and saving is a good quality to have.

You need not start when your 5 years old, but even starting earlier in life will get you to your goal faster. Paying a percentage of what you earn into a savings account while still living with your parents. It could be just putting $35 a week away since your 15. When your 25 you will have $18,200. Depending on where you want to buy, this might be an adequate deposit. If your parents are in the position to match your savings, this can be $36,400.

Advantages of Owning A Home

  • Its yours you can do what you want
  • Security
  • Invest- Homes typically increase in value.
  • Not at the whims of the landlords
  • Greater privacy
  • Your costs are predictable and more stable than renting because they’re ideally based on a fixed-rate mortgage
  • Your mortgage payment is a tax deduction

Disadvantages of Owning a Home

  • long-term financial commitment
  • all maintenance on your home is your responsibility
  • Harder to move somewhere else
  • Mortgage payments can be higher than rent payments
  • Requires a deposit and closing costs
  • You can become ‘house poor’ if you borrow against your house in the future.

If you want more of the pros and cons, click here.

If you are looking to sell your home, contact TopNotch Agents Nz first.