Top 5 Reasons Why You Should Buy a Home Instead of Rent
About ten years ago, I had a retired aunt and uncle who rented a Washington DC condo. Uncle Jim (not his real name) was a former minister, and throughout his career, he and his wife lived in parsonages, which are homes furnished by the congregation while they ministered there.
He and his wife told me that the biggest mistake they ever made was not to invest in buying a home. When their other friends retired they all lived in homes that were almost paid off and had appreciated exponentially, while Uncle Jim and his wife were using a considerable portion of their limited retirement income to make expensive condo rent and regime payments.
Recent studies show that there are many significant benefits to owning your own home. Listed below are some of the primary advantages:
1) More Stable Housing Costs
Rent payments can be unpredictable, and you must anticipate a rise each year, contrary to most mortgage payments which remain unchanged for the entire loan period. If the taxes go up, unlike for renters the increase is generally gradual. Lastly, stable housing costs especially in times of uncertainty like we are currently experiencing, become even more vital to financial health and security. Think of it this way, while renters lose money, you as an owner make money.
2) Tax Savings
Homeowners are eligible for significant tax savings. Once you own a home, you can deduct mortgage interest and property taxes from your federal income tax, as well as many states' income taxes. Taking advantage of these savings can be a considerable amount of money. During the first ten years of paying down a mortgage, a high % of that payment goes towards merely paying off interest.
3) Debt Consolidation
If you need to, you can refinance a mortgage loan to consolidate other debts (an opportunity you don't have if you are renting.) What's more, the interest on a refinance is also tax-deductible.
Instead of your hard-earned money disappearing into someone else's pocket, homeowners are building equity in their own home. Each year you own your home, you pay more toward the principal, which is like having a scheduled savings account that grows faster the longer you have it. When the property appreciates, and as we see currently in the Charleston market greatly appreciates, it is essentially money in your pocket - not the landlords. Lastly, there is no better way to build wealth to accomplish your future goals like your child's education or retirement.
5) It is Yours!
When you own a home, you are in control. You can make any improvements you wish, decorate to your tastes, have a pet or two with no pet fee or rent, no one can pop in and inspect your home and threaten to evict you, and last but certainly not least, you can no forget the SECURITY DEPOSIT!
When considering home ownership, you need to weigh the advantages and disadvantages for yourself. If you are like most people, you will find that homeownership is worth the risks.
If you would like further information please reach out to one of our agents directly!