Top 10 Reasons to Buy
1. It will be Your’s and Your’s Alone - The freedom of owning your own home cannot begin to compare with the restrictions that renter’s experience. You can paint the walls the color you like, hammer a nail without the hassles from a landlord.
2. Lifestyle - Homeowners are a different breed. When you live in a neighborhood that is owner occupied, your neighbors, like you, are more willing to invest their time, money, and effort to improve their property value and community.
3. Equity Buildup - Rental payments are gone once you have made them. But with each mortgage payment, you are “buying” something tangible, you are building equity. The longer you own your home, the larger the equity. At any time you can refinance to "withdraw" your cash equity.
4. Keep Up with Inflation - A home is an investment that helps you keep up with inflation. Although not all homes appreciate at the same rate and some years are better than others, real estate has historically kept pace with and usually appreciated faster than the rate of inflation.
5. Income Tax Benefits - All interest paid on a mortgage is deductible for income tax purposes. Remember too, that property taxes and closing points are deductible, and that special tax deductions such as the Homestead Exemption and Energy Credits are also available to homeowners.
6. Payback on Improvements - A renter who makes property improvements does not receive financial benefits from them if they relocate. As a homeowner, you can realize some or all of the costs of improvements when you sell your home.
7. Trade-Up Value - Even if your first home is not your “dream home,” you are working your way up to it. With appreciation and some improvements, it may provide you with enough equity to make a down payment on your “Dream Home” later.
8. Future Security - Unlike rent, which goes on forever, mortgage payments are temporary, providing you with “rent free” living for your retirement. In addition, a mortgage payment with a fixed interest rate will remain constant over the course of the note. Rental prices typically increase 3-10% per year in many areas.
9. Investment Property - For some, investments in single-family homes are proving to be good tax shelters. You can realize profits and tax benefits from having renters who do not know the benefits of owning a home or investment property.
10. Don’t let the Mortgage Interest Rate Fool You - You pay much less in interest than the mortgage rate of your loan, because the interest you pay becomes tax deductible. Also deductible are many costs associated with closing your loan.
Do You Know How Much Rent You Pay?
|
Monthly Rent |
3 Years |
5 Years |
10 Years |
15 Years |
30 Years |
|
$400 |
$15,431 |
$27,603 |
$66,319 |
$120,619 |
$453,412 |
|
$500 |
$19,289 |
$34,504 |
$82,899 |
$150,774 |
$566,765 |
|
$600 |
$23,147 |
$41,405 |
$99,478 |
$180,929 |
$680,118 |
|
$700 |
$27,005 |
$48,306 |
$116,058 |
$211,084 |
$793,471 |
|
$800 |
$30,863 |
$55,207 |
$132,638 |
$241,239 |
$908,823 |
|
$900 |
$34,720 |
$62,108 |
$149,218 |
$271,393 |
$1,020,176 |
|
$1000 |
$38,578 |
$69,008 |
$165,798 |
$301,548 |
$1,133,530 |
|
$1500 |
$57,868 |
$103,513 |
$248,696 |
$452,332 |
$1,700,294 |
Assuming only a 7% annual Rent Increase
|
Should You Rent or Own? |
Rent |
Own |
|
|
|
|
|
Deduct mortgage interest and closing points in calculating income tax? |
No |
Yes |
|
Deduct real estate taxes in calculating income tax? |
No |
Yes |
|
Build Equity (Savings)? |
No |
Yes |
|
Hedge against inflation (appreciation and profit potential)? |
No |
Yes |
|
Improvements within the home become and investment in future value? |
No |
Yes |
|
Can lease out or sell whenever you want to move? |
No |
Yes |
|
Feeling of financial security? |
No |
Yes |
|
Property can be put in trust? |
No |
Yes |
|
Property can be passed on to heirs. |
No |
Yes |
|
Property can be later refinanced to "withdraw" cash equity? |
No |
Yes |
|
Fixed mortgage payments that help stabilize monthly living costs? |
No |
Yes |
