If you are attempting to make a decision about whether to rent or own a home, consider all of your options before jumping into anything. Some people think they will save money by renting first while others feel they cannot afford to own a home. The longer you rent, the less likely you will be inclined to buy a home. It’s easy to fall into a pattern and miss out on opportunities. If you are renting for more than 2-3 years, take another look at your financial situation and see if it is advantageous for you to take that next step. You may be surprised at what you can afford.
Regardless of your criteria for making your decision, owning a home is definitely a better option and here are 5 reasons why:
Home ownership builds future wealth through its appreciation over time. This is, of course, more beneficial to you if you buy earlier in the game. Also, many people are concerned with the unsteady real estate climate, but even with these temporary fluctuations, the long term home value trends (5-10 years) always reveal an upward slope.
Your mortgage interest is fully deductible as long as the balance on your loan is smaller than the price of your home. For most people, interest is the largest component of their monthly payments. This can add up to significant money back in your pocket.
Property Tax Deductions
Property taxes for a first home or a vacation residence are also deductible on your tax returns. Research the laws in your state and find out the criteria for receiving money back on your property taxes. In some states, it is a major cost savings.
Pride and the American Dream
The pride of ownership compels people all over the nation from Atlanta roommates to Los Angeles apartment dwellers to everyone in between; all types of people yearn to buy a home and realize the American dream. With your own home, you can paint the rooms any color, tear down a wall and renovate however you see fit. Home ownership gives you that sense of freedom and pride that you are investing in your future and leaving a legacy behind.
Longevity and Security
The sad statistic is that people who rent are often thrown out of their homes periodically and without warning. Renting is temporary in the eyes of many landlords and they often sell their homes at a moment’s notice. This leaves you in a tough spot, always on the move looking for a nice place to call home. Furthermore, rent payments will increase with the cost of living which can surprise you if you are not prepared. If you own your home, you have the freedom and security of longevity and comfort. You call the shots and determine when, how, and why you want to leave your home.
The benefits of home ownership are blaring, but ultimately it is your decision to make. If you always dreamed of owning a home, take the time to assess your financial situation and take the plunge while you can. You can finally hang up your hat and experience the comfort and future rewards a new home can give you.