There can be many downsides to both renting and buying, depending on what side of the coin you are on, but if you’re leaning towards purchasing a home it can have added benefits for your bank account that renting does not. While renting can certainly alleviate many of the costs that go along with property ownership, here’s why purchasing a home can have positive monetary affects in the long run. Furthermore you have the satisfaction of living in a home that reflects YOUR individual tastes.
Whose Mortgage do You Want to Pay?
Keep in mind that you will be paying someone’s mortgage – either your own or your landlord’s. Home prices do go up and down in cycles over the short term but if you stay for a long time you are likely to see an increase in value. Many people see a good return on their investment.
The Good Impacts of Inflation
While inflation is often seen as a dirty word, a real estate purchase can see the positive side of inflation with how your home purchase investment will grow over the years. Putting money into rent will mean that money is gone and out the window once you’ve paid for the month, but investing into a property will come back to you in future gains that are made in the real estate market. While buying a home will be more expensive in the short term, it can also provide you with greater financial flexibility and equity in the future. In the long run, rental and housing prices have gone up significantly in recent years and will probably continue to do so. So doesn’t it make sense to buy now and watch you money grow?
Home ownership can reduce the amount you pay in income taxes each year. Mortgage interest and property tax payments may be deductible from your federal taxes and many state taxes. The biggest bulk of your mortgage payment in the early years goes toward interest so the tax deductions are greater in those years and can put a significant amount back in your pocket.
Create the Home YOU Want
Home Sweet Home! Tired of beige walls and carpet? Owning your own home offers the freedom to create your dream environment. You can paint the rooms whatever color you want, change the flooring and carpeting, and own pets. You don’t have to ask anyone else’s permission or live with a bland environment.
Renovations Will Increase Home Value
While changing up the bathroom or the paint on the wall in your apartment isn’t going to add any extra lining to your wallet when you move out, making upgrades to a home that you own will have the very opposite effect! Renovations can certainly be unpopular while they’re taking place, but no matter how small or large, they can mean an easier sell and a higher profit when the home finally goes on the market.
The Opportunity For Rental Property
An apartment you rent won’t offer opportunity for investment if you’re away from your home for an extended period of time, but a home you own may serve as an ideal investment property at some point in the future. With the success of Airbnb and unique modern housing needs that may only require a home rental for a short period of time, being able to use your house as a rental property can be a significant boon for earning money you would have otherwise been without.
Becoming a homeowner comes with additional responsibilities but also incredible rewards. It can require a lot of number crunching in the beginning that rent does not, but it can also provide significant financial benefits down the road that might not exist without such a purchase. If you’re considering purchasing a home in the near future, please contact me at 843-471-7315 or Shawn.Phillips@kw.com. Want to start your search now? Click here: Shawn-Phillips.kw.com
I look forward to earning your business!