4 Reasons Why You Should Buy Your Home Instead of Rent
Purchasing a home is a big decision, but it is one that comes with a lot of benefits. Renting a home may seem like the more affordable option, but in the long run, you may find that you are better off buying. In addition to the financial benefits of homeownership, there are some lifestyle perks that you just don’t get renting.
Customize Your Home
Every family is unique and your home should work for you! With a rental, you’re restricted in how you can decorate or refinish the home you’re living in. As a homeowner, you can make changes that make your home more comfortable or practical for you.
Many homeowners find, as they live in the home, that they’d like to change features of the home to suit their lifestyle. You can add hardscaping if you’re an avid outdoor entertainer, put in a play-set if you have children, or add fencing to keep kids and animals safe. As a renter, your choices for these things are limited, and any investment you make in the home is lost when the time comes to move.
As a homeowner, you have the freedom to alter and customize your home so that it is exactly the way you want it. Whereas with a rental you are confined by your leasing agreement and the preferences of your landlord.
Save for a Rainy Day
Building equity is one of the more obvious benefits to owning a home, you can also think of it as a savings account you don’t have to think of!
Every month that you pay your mortgage, you pay down the principal on the loan and build equity in your home. Equity is the difference between the value of your home and the amount you owe. As property values increase and you make payments toward the principal on your loan, the equity in your home increases. For example, if you financed $100,000 for a home and the value increased by $10,000 and you paid off $10,000 you would have $20,000 in equity. Eventually, you’re able to get the equity out of your home and use that money. You can sell the house and use the equity as a down-payment on a new home. You can also do a refinance where you get the equity out in cash which you can use to pay down higher-interest debt or to renovate and make improvements to your home.
You begin building equity right away as a homeowner! As a renter, once you’ve made your rental payment it’s gone to your landlord and it can’t benefit you beyond the month’s rent.
Keep Housing Costs Stable
You may be thinking that your rent is affordable right now and that a mortgage would cost much more. This usually isn’t the case! Most landlords have mortgages on their rental property. Your rental payment covers the mortgage, the maintenance, property taxes, and profit for the owner. Many people are able to purchase a home and keep their payments about the same as their rent!
Even better? Your mortgage payment will stay the same for the life of your loan. No more worrying about rent increases, or having to adjust your budget every year or two to cover the ever-rising rental rates.
Enjoy Tax Benefits
Owning a home provides you a few different tax benefits that you are not able to take advantage of as a renter.
Mortgage interest is tax-deductible, so a portion of your mortgage payment each month can be written off and save you money. For every year you own your home, you’re able to write off the amount of interest that you pay each month which reduces your overall tax liability.
Another way that a mortgage can help is that the equity in your mortgage is often not taxable when your house is sold. This will depend on how long you live in the home, and whether or not it is your primary residence. If you buy your home for $100,000 and live in it for ten years, you can sell it for $300,000 (remember, real estate goes up in value). The $200,000 you make in profit is not taxed as income.
Red Door Homes-Build your dream home for the cost of rent
Overall, renting is just as costly as a monthly mortgage payment and you don’t experience any of the benefits of homeownership. At Red Door Homes, we make building and owning a home accessible and affordable. Check our website to learn more about how owning a home is closer than you think!