Renting vs Buying
1) IT WILL BE YOURS AND YOURS ALONE: Owning your own home frees you from the restrictions that renters experience. You can paint the walls the color you like ... hammer a nail where you want ... all without hassle from a landlord!
2) LIFE STYLE: Homeowners are a different breed. When you live in a neighborhood or complex that is basically owner occupied, your neighbors, like you, have invested in and care about their property. They are willing to spend more time, effort, and money to improve the property and the community, which in turn improves the value of the property!
3) EQUITY BUILD-UP: Once you have made them, rental payments are gone. But with each mortgage payment you are buying something tangible and building up equity. The longer you own your home, the greater will be your equity!
4) KEEP UP WITH INFLATION: A home is an investment that helps you keep up with inflation. Not all homes appreciate in value at the same rate, and some years are better than others, but real estate historically has kept pace and usually has exceeded the rate of inflation!
5) INCOME TAX BENEFITS: All interest paid on a mortgage is deductible for state and federal income tax purposes. Moreover, sate and local property taxes also are deductible. Generally speaking, 90% to 95% of your house payment is income tax deductible during the early years of the mortgage!
6) PAYBACK ON IMPROVEMENTS: A renter who makes improvements on the house they occupy enjoys no financial benefits from them when they relocate. As a homeowner, you can recover all or part of the cost of the improvements when you sell your home!
7) TRADE-UP VALUE: Even if your first purchase isn't your "dream home" you will be working your way up to it when you buy any home. With appreciation and possibly some improvements, you are building equity that, one day, will make your dream home a reality!
8) SECURITY FOR RETIREMENT: Unlike rent, which goes on forever, the mortgage on your home will someday be paid, providing you with "rent free" living for your retirement.
9) INVESTMENT PROPERTY: For some homeowners, second houses or condominiums are proving to be good investments as income producers or as tax shelters, or both. As the owner of investment property you can enjoy not only extra income but also additional tax benefits from the depreciation allowance which is provided un der present tax laws!
10) INTEREST RATES MAY BE DECEIVING: Because the interest is tax deductible, the "effective" interest rate is lower than the note rate. For example, a mortgage interest rate of 12% becomes an "effective rate" of 8% for a married couple with taxable income of $25,000 after taking the tax benefits into account. |
