Life evolves in stages, and at some point in life, most individuals decide to continue renting a property or officially become a homeowners. There can be an argument for either option, considering both routes have pros and cons. This article discusses the benefits of owning a house and the importance of helping tenants become homeowners. Assisting these individuals can be a significant step towards generational wealth accumulation and stability for the individual and their families.

Benefits to Becoming Homeowners

The most significant benefit of homeownership is the freedom and control over the property. Homeowners can personalize their living space, making improvements according to their preferences. As a tenant, you must obey the landlord’s rules and guidelines, requesting permission even to change the color of a wall. A common factor often overlooked is the homeowner building equality in their property over time. Owning a home, the individual pays their mortgage monthly while there is potential for appreciation considering most of the time, real estate increases in value.

Disadvantages to Owning Property

While homeownership offers numerous benefits, it’s vital to consider the disadvantages of owning a property when considering leaving the renter’s life behind and making the significant decision to purchase a home.

  • Owning a home requires a level of financial commitment and a variety of expenses to consider, from monthly mortgage payments, property taxes and insurance, maintenance costs, and necessary house repairs.
  • When owning a house, you are tied to one area, making it slightly difficult to pick up and relocate. Selling a home can be lengthy and expensive, involving multiple real estate fees.
  • The is a risk of foreclosure with owning a house; if you fall behind on your mortgage payments, you may face foreclosure, while renters can usually locate a cheaper apartment after their monthly or yearly lease.

How to Help a Tenant Become a Homeowner

Helping a tenant become a homeowner requires the real estate agent to provide resources and support to transition from renter to homeowner. It’s a lengthy process that must be approached correctly.

When working with a client looking to become a first-time homeowner, it’s crucial to provide resources for financial education for the individual to understand the home-buying process, improve their overall credit, properly budget for monthly expenses, and find ways to save money toward the downpayment. The downpayment can vary between 3.5% and 20% of the property’s sales price. So, you must provide your clients with information on assistance programs offered by government or non-profit agencies. First-time homebuyers qualify for a FHA loan, which allows the buyer to place down closer to three percent of the sales price. If purchasing a house at the current moment isn’t a reasonable option, help the client explore rent-to-own opportunities. A rent-to-own program is when a portion of the tenant’s rent goes towards building equality in the property with a pre-determined price, so eventually, the tenant will purchase the rights to the home.

As a real estate professional, maximizing the resources and programs available for the individual or family you work with is essential. Purchasing a property is expensive, so guiding the potential homeowner in the right direction is vital to ensure the proper investment. Work with a lender to determine the most appropriate loan for the client.

Renter to Owner

Purchasing a property is a significant decision; owning a house may not be the most appropriate route for everyone. Homeownership comes with great responsibility, from financial burdens such as property taxes/mortgage payments to the physical labor of proper home maintenance.

If an individual has a stable income, purchasing a property makes sense, considering most of the time, real estate increases in value. Plus, who doesn’t like the freedom to have guests come and go, along with the ability to make any property adjustments? Suppose you’re currently a tenant, considering possibly buying a house. In that case, it’s suggested to begin saving money, establishing credit, and speaking with a licensed realtor. Utilize every resource and follow the guidance of the professionals who assist individuals with the transition from renter to property owner!

Guest Contributor – Ryan Bullock is a licensed agent in Philadelphia with Keller William. He can be reached at [email protected], 215-509-9510