Based on age demographics, most young people would often begin their independent lives renting an apartment and as they grow older - building their careers and starting their families - many would go the homeownership route. For as long as we can remember, having your own house has always been a measure of success for most people. The American dream would always consist of a beautiful home with white picket fence, a welcoming front porch, and a spacious backyard. Buying a house has become a significant indicator of one's financial capability and success. But the age-old debate of buying versus renting a house has plagued the real estate market for the past years. While the reason for being a homeowner may vary from one person to the next, the fact still remains that home ownership is the best pathway to wealth.
Here are our Top Reasons Why Buying a Home is The Practical Long-term Choice
Being a homeowner lets you avail of certain tax advantages. You might be able to deduct mortgage interest and property taxes. Check with your accountant to find out if you qualify for certain tax advantages such as Homestead Exemption and Federal Tax deductions. These benefits aren’t available to renters.
Buying Is Cheaper than Renting
There may be a lot of costs involved in buying a home especially as you would need to prepare a sizeable downpayment for your new home. Same goes for renters as landlords require security deposits and advance payments. But in the long run, buying is cheaper than renting. Beware of the Rental Trap, a term for being locked in a rental contract in a specific period of time while the rental costs rise. The renter is essentially "trapped" in an endless cycle due to rising rental amounts and not able to gain enough foothold in terms of financials.
Monthly Housing Expenses Are Set
If you purchased your home through a fixed-rate mortgage plan, it simply means that your monthly housing cost is fixed and locked and will remain the same for the next 5, 15, or even 30 years. As you pay off your mortgage and build equity over time, the value of your home will continue to increase due to inflation but your monthly costs are fixed. For renters on the other hand, unless you are in a rent-controlled neighborhood, rent can increase whenever you sign a new lease.
Building Equity Over Time
Unlike renters, homeowners build their equity over time. On most mortgages, a portion of each monthly payment goes toward the loan’s interest. The remainder pays off its principal amount. Every dollar you pay towards your loan’s principal amount represents a dollar of equity – actual ownership of the property. Think of it as forced savings as this equity you build through time will allow you for extra means to tap financial resources from in the future such as for paying off high-interest debts or maybe putting the kids through college.
More Creative Freedom
Buying your own home means having a free rein to design, decorate and renovate to your heart's content. It gives you the creative freedom to do what you want with your property as opposed to renters that are bound by their lease agreements and what they can or can't do to the property. Having your own home and investing in home improvement projects will also boost the home's value and in the event, you decide to sell, can definitely increase the market value of the property.
Choosing to buy a home is always a big step. Only you and your loved ones can decide if you wanted to take that leap. There are a lot of options if you would like to invest, but having a home that provides you and your family a place to call your own will always be a good investment. So before you sign another lease, maybe it's best that you chat with a real estate professional in your area so you could learn about what options are available for you.