Shelter is one of the most basic human needs. Having a space to call home gives you a place to retreat to at the end of a long day. It can also be the source of memories as you grow older, whether you live there by yourself or choose to raise a family.
The type of home you live in has a big impact on the living experience you will have. Renting an apartment is a great way to get started in life once you have completed your education and are ready to start working and earning a living. Other options include condos, townhomes, or even moving in with your parents.
Becoming a homeowner is another option when you are looking for a place to spend your days and nights. There are some serious advantages to homeownership, but there are also a few drawbacks. Let’s discuss some of the pros and cons of owning a home in Arizona.
Exploring The Pros And Cons Of Arizona Homeownership
Pro: Monthly Payments Build Equity
Most buyers will look to secure a conventional loan or another type of mortgage product to help finance their purchase of residential properties. That is because houses are generally too expensive for people to afford outright. While rental payments only allow you to occupy the space, mortgage payments slowly build equity in the home. Equity allows you to benefit from how much you have paid into the principal balance for cash-out refinancing or selling the home and earning a greater profit from the transaction.
Con: Affordability
Homes are very expensive. The average home value in Arizona is about $420,000. Most people cannot cover that type of payment upfront, which is why loans are incredibly useful tools. However, between the principal amount and the interest, you may be paying high monthly premiums for years. Many loan terms are as long as 20 or even 30 years just to make the monthly payments manageable. Though these payments are an investment because they build equity, you are still being locked into large payments for a long time.
Pro: Freedom to Make Changes
When you own a home, the property belongs to you. This means that you can inflict your will on the design choices, upgrades, and improvement projects that you desire (as long as they adhere to local codes). Generally, rentals do not allow you to make any significant changes to the property. For example, you could build an addition for a home office that could help you change your life situation to reduce stress in the form of a new remote job. If you want to sit out in the sun in an outdoor living space, you could obtain a building permit to construct a deck. Investing in a bathroom remodel is another option. Owning a home gives you more freedom to change the property to fit your needs.
Con: Many Hidden Costs
The mortgage is not the only cost of owning a home. All utilities will be your responsibility, such as gas, water, electricity, and other HVAC systems. Perhaps the biggest hidden cost of homeownership is maintenance. When you have a landlord, you probably make requests for fixes or maintenance that the landlord passes off to their contractor or property management company. In a home, it is all on you. That means you have to either do repairs yourself or pay professionals to do so. Other costs include property taxes, potential homeowners’ association fees, and mortgage insurance.
Pro: More Privacy
Even if you live in a densely populated area like Phoenix or another Arizona city, there is still more privacy with most homes than rentals. Typically, living spaces that you rent have shared walls and outdoor spaces with other residents. A home that you own, on the other hand, has its own property lines and structure. Even neighbors that live a few meters away are still much more secluded than someone who lives on the other side of your wall or above your ceiling. You also have a yard that can be used for entertainment, play, or relaxation that only belongs to you.
Con: Locked Down to One Location
Some of the younger generations, especially millennials, are less likely to own homes than previous generations. For various reasons, many individuals and families do not want to commit to the long-term living situation that comes with a home purchase. Renting is far more attractive for on-the-go lifestyles and people who do not want to settle down since most leases last about a year. Meanwhile, mortgages could be 15, 20, or even 30 years long, though you still have the option to sell before that period is over.
Is a Home Worth It?
The answer is up to you. Hopefully, this guide has provided a little bit of insight into the costs and benefits of owning a home in Arizona to make your decision easier. It really depends on the kind of lifestyle you want and your available financial assets.
