Dear Heather,

We could afford a house however our rent is reasonable, the landlord takes care of everything and we are really saving money.

We are afraid there will be extra costs associated with owning a home, and we might be better off just to keep on renting and keep on putting money aside.

Happy Renting

Dear Happy Renting,

There’s no arguing there are costs associated with owning a home but the adverse is also true: there are also definite costs associated with NOT owning a home.

The benefits of buying versus renting have always been a much-debated topic, with a lot of people believing that — at least in the short term — renting is more cost-effective. But most people don’t consider the hidden costs of not owning a home and putting your money into your rental.

Here are four sneaky ways that not owning a home will cost you:

1. Your pricing is never guaranteed

When you rent you are at the mercy of your landlord. They can (and often will) increase the price of your rent often to keep up with market prices. So what does that mean for you? Well, it means the price at which you agreed to rent the house or apartment for, will stay in place for the duration of your lease.

However, it is not necessarily the price it will rent for in future years, which leaves you with two options: agree to a higher price or find a new place to live (which is an expensive and time-consuming endeavour).

When you own a home, your mortgage payment should remain fairly constant throughout the length of your loan. If interest rates increase, although your monthly payments will increase slightly it is unlikely that they will increase substantially. The stability of having a mortgage gives you the peace of mind of knowing what to expect each month and not having to worry about dramatic rent increases that completely throw off your budget.

2. Investing in home improvements is a lost cause

Everyone wants to feel comfortable in the place they call home whether they own or rent. That means different things to different people. Maybe it’s cosmetic changes, like painting walls or hanging art, or more practical changes like installing new tiles, up-to-date air conditioning and luxury appliances.

When you own a home, making the improvements necessary to make your home feel comfortable makes sense. Whatever you do to improve your home will only increase the value, making it a sound investment choice.

But when you don’t own your home, making any improvement (providing your landlord agrees) is like throwing money away. If you retile your bathroom walls or redo the flooring, you can enjoy them for a while, but they’re not coming with you when you move out.

The only person that investment makes sense for is your landlord. Some landlords might not even allow you to make any improvements or changes at all.

Everyone wants to improve the place they live. But if you don’t own a home, making those improvements just isn’t a sound investment.

3. You can’t always get what you want

When you own a home you get to choose the services, amenities and appliances you enjoy. You can choose between gas or electric stove, large or small fridge, cost-efficient split-system air conditioning or window air conditioning; you can install solar panels if you want to save money on energy costs.

When you don’t own a home? Not so much.

When you rent a home you’re locking into the services, amenities and appliances that are tied to that property. Your landlord may give you a list of approved service providers you have no choice but to work with and, often times, those suppliers aren’t the most cost-efficient. All of those costs can quickly add up.

When you own a home you make the choices on what you want to pay for, which can save you a lot of cash.

4. You’re not building any wealth

Perhaps the biggest cost of not owning a home is the fact that you’re not building any wealth.

When you rent a home you’re giving your money to someone else; you’re paying for the right to live there for a predetermined period of time.

When that predetermined period of time is over, you walk away with nothing and all of that money is gone.

When you own your home, every time you make a mortgage payment, you’re paying down your loan and building equity in your home.

This is one of the fastest and most efficient ways to build wealth — and is a significantly better investment than throwing your money away on rent every month.

You already know that buying a home is a better investment. But when you factor in all the hidden costs of not owning a home, it might be the less expensive one as well.

5. Now is a great time to buy

Believe it or not we have an attractive and varied inventory available for first-time buyers. Mortgage rates are attractive; why not make an appointment with the bank to get preapproved? Then look around. You may see something you love!

• Heather Chilvers is among Coldwell Banker Bermuda Realty’s leading sales representatives. She has been working in real estate for 27 years. If you have a question for Heather, please contact her at hchilvers@brcl.bm or 332-1793. All questions will be treated in confidence. Read this article on Facebook: Ask Heather Real Estate