In our previous article we examined some of the reasons for renting over buying. Now, we’re going to talk about why, and when, it makes more sense to buy. The following are some pretty compelling reasons to buy a home. If you’re a renter, take note: Buying a home may be as affordable, or more affordable, than renting. Talking to a lender is the only way to know for sure. If you are financially able, and still unsure, below are some reasons to consider.
Equity. Paying rent is like kissing your money goodbye forever. Sure, you it buys you a place to live. But with each new billing period, that money is forever forfeited, at least as far as your landlord is concerned. Buying a home, on the other hand, comes with the advantage of building equity with each mortgage payment. You can borrow against your equity to pay for important things, such as college for your kids, family vacations, or even home improvements that increase the value of your home. Or, if you prefer, let your equity build over time and reap the reward of eventually owning an asset of significant value free-and-clear. It’s nice to know that with each house payment, you’re investing a little in your own future, not some landlord’s future.
Tax benefits. Money spent paying for the interest on your mortgage may be tax deductible, assuming the tax laws have not changed. Plus, the first $250,000 in profit made from selling your home may not subject to a capital gains tax, depending on current tax laws.
Control. Feel like painting your walls lime green with polka-dots? Go right ahead—they’re your walls! Or how about knocking down that non load-bearing wall to join the living room and kitchen? Again, it’s your home. So long as you obtain the proper permits, and don’t violate any local building codes you’re free to do as you wish. While some exterior improvements may be subject to certain covenants and restrictions, you are for the most part free to do as you wish to the exterior of your home as well. Compare this to renting, where you have to get your landlord’s permission, or risk losing a portion of your security deposit.
Make your own maintenance decisions. When you rent, you’re at the mercy of your landlord’s timeframe when something goes wrong or needs servicing. Not only this, but you have no choice over who performs the maintenance. Your landlord will use whatever contractor he or she prefers, and there’s nothing you can say about it. When you own your own home, you and nobody else decides when something gets fixed and by whom. Do it yourself if you like, or hire the contractor of your choice.
Click here to read the advantages of renting a home.