Renting? Quit Wasting Money and Purchase a Home Instead
There are numerous benefits when it comes to owning a home over renting one, not least that the current real estate and mortgage market has created the best opportunity we’ve seen in a long time to transition from writing a monthly rent check to building up equity in your own home. It may be the best financial decision you can make, so I am going to focus on the main reasons that will make you wonder why you haven’t purchased a home sooner, and offer a couple of great tips on how you can do it affordably.
Rent Continues to Increase
Over the last decade, rent has continued to rise at an astronomical rate throughout the country, and the expectation is that it will only continue. In many markets like Nashville and Austin, increases in rent have surpassed the rate at which the median income has risen. This means that the average cost of rent is no longer a cheaper option overpaying a mortgage on a home you purchase. You don’t have to take my word for it though, Zillow’s Rent vs. Buy Calculator can show you how many years it will take before the cost of buying equals the cost of renting.
Purchasing a Home is a Better Long-term Real Estate Investment
When you rent a home, you are essentially lining a landlord’s pockets with your money, with nothing to show for it. When you decide to purchase a home, you are growing equity in the house with your monthly payments and building up your own wealth. After a 30-year mortgage, you will own a home that you can sell but when you rent a property for 30 years, you come out with nothing except a happy landlord. It’s also worth noting that mortgage payments rates can be fixed at a certain rate, whereas rent is never guaranteed to stay the same; your landlord could decide to hike up the price any time they choose.
Ever wonder what you could do with a home YOU owned, where you didn’t have to worry about getting permission from your landlord for the tiniest thing such as owning a pet or painting a wall? With homeownership, the options are limitless. You could run your business from home, open a shop in part of it, or even rent out a room for a little extra income. As an owner, everything is completely up to you – whether that’s how much you charge, or the decision to rent to a long-term tenant in your basement over short-term Airbnb. There’s no landlord you need to ask permission from or roommates that need convincing. The power lies with you.
Tax Deductions and Low Interest Rates
Apart from being a long-term endeavor, being a homeowner does benefit from short-term savings through annual tax write-offs and mortgage interest payment deductions. These deductions often amount to significant savings and are just one of the many perks available to people who decide to buy instead of rent.
The argument for buying over renting only strengthens when you look at the market and see the historically low-interest rates that are currently available. Even the slightest change in your mortgage rate can make a tremendous difference in your monthly payment. The rates right now are extremely competitive, which means that many renters are paying more each month than homeowners on their mortgage. And with renting, you don’t get to take advantage of that yearly tax deduction either!
Learn More About Home Buying from Nashville’s Most Neighborly Brokers
With the many benefits that are tied in with owning a home, you owe it to yourself to find out whether owning or renting is the best fit for you. Ultimately it depends on which kind of lifestyle you are wanting to live. Are you looking to maintain flexibility and mobility? Working on repairing your credit history? Or planning to live in a place less than two years? If this sounds like you, renting may be what suits you better. However, if you are looking to live in an area for more than two years, want to build investment equity over time, and are actively looking for ways to further your tax deductions, then owning a home could be a great next step. Why not start the process and speak to a qualified mortgage lender to see what your options are going forward? And if you need help finding your perfect, dream home, give one of our team members a call today. We’d love to work with you and offer you the benefit of our many years of experience!