There can be a lot of apprehensions when it comes to buying a home. There are some obvious benefits but is it really better than being a renter?
Owning a home is a milestone many people hope to reach at some point in their adulthood, but the process of putting in offers and getting rejections can be bitterly disappointing. It’s fair to wonder if you’re just better off renting.
As tempting as it can be to forgo the grueling process of house hunting, it’s a good idea to buy instead of rent if you can. There are many benefits to owning a home that you don’t want to miss out on. Read on to see why you should consider buying a home instead of renting.
It’s an Investment
You’ll hear this again and again. Buying a home is one of the best investments you can make. Unlike other big purchases such as electronics or vehicles that lose value over time, a home will appreciate in value. Believe it or not, a home could offer more financial benefits than investing in stocks. Generally, a home will appreciate at a greater rate than stocks because you earn based on the overall value of the dwelling rather than just your down payment. You also get the added benefit of getting to live and enjoy your investment every day in real-time.
You Have Free Rein
Renting leaves you limited to the whims of your landlord. Want to paint a wall? Better call the owner first. Hate the backsplash in the kitchen? You’ll just have to live with it until your lease is up.
Owning a home gives you the freedom to customize your space to your heart’s desire. Aside from securing permits for select renovation projects, you won’t need any special permission to change your home. Owning a home also gives you free rein to have a pet, set up utilities on your own terms, and countless other decisions that usually fall on a landlord.
Fixed Monthly Payments
There is no guarantee that your rent will stay the same once you resign your lease. Some landlords will even incrementally hike up the rent each year. You can avoid these changing payments by buying a home.
While some mortgages can be subject to changes in monthly prices, there are options available for homeowners to negotiate a loan with a fixed monthly payment. Lenders can offer you a fixed payment for a set amount of time up to ten years. Fixed payments aren’t typically something a landlord is willing to offer.
There Are Tax Benefits
Owning a home can come with a host of tax benefits. One perk is that imputed rent is not taxed. This means that the return you receive as a homeowner is not included in your taxable income. In contrast, landlords have to count the money they receive from tenants as taxable income.
Another tax benefit that comes with homeownership is getting to deduct certain expenses from your federal taxable income. For example, you could deduct mortgage interest or property taxes from your taxes if you itemize your deductions. This deduction must reach the standard deduction rate to be viable.
Great For Building Credit
Your credit score dictates how reliable a lender may deem you to be based on current open credit lines, payment history, total debt, and a number of other factors. Investing in a home can be a great way to bolster your credit score if it’s already in decent shape and you make your payments on time. Not only will you get a boost in your credit score but you’ll also earn money at the same time as your equity grows.
It’s Actually Cheaper
Once you get the initial down payment out of the way, your mortgage payments can actually be more affordable than renting. Contrary to what some first-time homebuyers may assume, monthly payments are actually quite reasonable. Renting fees, on the other hand, will not only cover your landlord’s mortgage but also include added fees so they can turn a profit. You can avoid these additional costs by becoming your own landlord.
Eventually, You’ll Have No Payments
Most people will pay off their home in 20 – 30 years. That might sound like it’s a long way down the road but even still, you will not have a monthly payment to concern yourself with once you reach this milestone. As a renter, you’ll always have fees to pay at the beginning of the month. Your money is going towards helping your landlord pay off their mortgage. It’s a much better use of your time and money to buy a home and chip away at your own debt so one day you won’t need to worry about monthly housing payments.
Take it From a Realtor
If you’re thinking about buying a home, the next step is to reach out to a realtor to see what your options are. Buying a home is an exciting and rewarding experience. There are layers of complexities that you will need a guiding light to help you work through when buying a home. A realtor is there to alleviate your stress and answer any and all questions you have about the benefits and overall process of becoming a homeowner.
I am happy to help my neighbors in Saint Augustine, Florida take the exciting steps towards buying a home. From identifying homes you’ll love to view to sealing the deal on closing day, I will be there with you every step of the way! If you have any questions please don’t hesitate to reach out!
1. Financial Samurai
2. US News and World Report