Reasons to buy instead of renting a home.
Today is the first day of the month, and as per usual — day of paying rent! But have you ever thought about investing that money in something for you and your family instead of giving that money to your landlord every month? Let’s look at the benefits of buying instead of renting a place.
It’s An Investment — Buying a property is an investment for the long term. As each monthly mortgage payment is taken, you know that you are paying off that big loan and earning more money due to the property price rises that will occur over a period of time. Buying a house may not be something that makes you money quickly (in fact, it is extremely expensive to move house, and there is a lot to consider), but if you can stay in your home for a good number of years, or even until the mortgage is paid off completely, you can walk away with a lot of money. If you rent a place, your monthly payments are simply going to the landlord, and you are not making anything out of it.
It’s Yours To Do What You Want With — If you rent your home from someone else, then your landlord is the one who is in ultimate control of what happens within it. If you want to make any changes, you will need to go through them first. However, if you own your own home, you can do anything you want with it. If you want to change the wall color, that’s your choice. Change carpets to hardwood flooring? You can. There is a certain amount of freedom that goes with owning a home rather than renting one. When you own a home, no one can tell you whether you can or can’t have a pet, and no one can prevent you from turning a study into a nursery, or vice versa. Renting can come with a big list of dos and don’ts, and it can make living somewhere feel a lot less like being at home.
Tax Benefits — Although taxes can be complicated, there are ways for homeowners to deduct mortgage interest in their tax returns. This means that even more money can be saved. It is a good idea to put this money into a high yield deposit account if possible, because that way you really can make your investment work as hard as possible for you.
Build Credit — Owning a home can help to build your credit. Having a good credit score allows you to borrow money to buy the things you really want and need in life, and one of the ways to build that credit score up so that it is attractive is to take on a long–term investment, exactly like buying a property. You will have more financial stability and — because of the equity built up in your home — you will also have a financial safety net.
It’s Cheaper — Despite the expensive initial outlay (including the down payment and removals costs), owning a home is generally a lot cheaper than paying rent. This is because when you rent, not only are you paying your landlord’s mortgage, but you are also paying an additional sum on top because they will want to make a profit. Your money is going towards building up your landlord’s equity in the property, which means that they could choose to sell it at any time thanks to your contributions.
Beatriz Moitinho is a Real Estate Salesperson, specialized in Luxury Real Estate and a Productivity Coach at Keller Williams New York City.