When it comes to real estate, there is one debate that remains as heated as ever: Is buying or renting a home better? If you have ever wondered this yourself, here are a few arguments which prove that buying a home is often the smarter decision.
Do as You Please
Those who rent a place know very well the strict provisions regarding modifications to the property. Even something as simple as repainting the walls will need the consent and approval of your landlord. To be fair, he has every right to say “no” to such a project. After all, you don’t own the place and he has to ensure that the property he looks after isn’t damaged or defaced. Therein lies the biggest downside to renting: you are paying money for something you don’t own.
Build Your Equity
One of the biggest perks to owning a home is the emotional fulfilment it provides. However, a home can also be a financially rewarding investment. As previously mentioned, rent payments are basically wasted money. Mortgage payments, on the other hand, are the complete opposite. With every payment you make, the equity in your home increases.
Why is this important? Because there are special loans that allow you to borrow against this equity in the future, be it for your child’s college education or for a major home renovation. You won’t enjoy any such benefit from a rented property, however.
It’s Basically Tax-Free Wealth
As they say, there are only two things certain in life: death and taxes. And the more money you earn, the bigger the cut Uncle Sam will take. However, home equity isn’t something the IRS can tax. Your home is definitely a part of your investment portfolio and thus contributes to your wealth. But, unless you sell it, you can’t be taxed on it. In short, your wealth is growing thanks to your home’s value, but the wealth is all yours.
Another great thing about owning a property is that you can become a landlord yourself by either renting a portion or the entire home (especially if it’s a second or vacation home). For instance, a spare room or an unused den can be rented out, and the payment can then be used to cover—or at least help subsidize—your mortgage payment. In short, the rental income makes paying off your mortgage easier and faster.
Did you know the government actually rewards you for being a homeowner? If you itemize your federal income taxes, you can deduct the property tax and mortgage interest from your taxable income. This often leads to considerable tax discounts unavailable to renters.
Another year, another rent increase. This is just one of the big gripes renters have about their landlords and renting in general. Conversely, this isn’t an issue for many homeowners. Assuming you have an excellent credit rating and a fixed-rate mortgage, you can rest assured your monthly payments (principal and interest) will stay the same throughout the length of your loan.
Theoretically speaking, the rent you pay may actually end up being more than a mortgage payment because of inflation and yearly increases. A fixed-rate mortgage, on the other hand, protects you from this price volatility.
Of course, renting is a viable option if you truly can’t afford to buy a house right now. But if you have the financial capability, the aforementioned perks are simply too good to pass up. So, if you’re interested in purchasing one of the Hanover homes for sale, be sure to contact one of our exclusive buyer agents ASAP.
Housing Solutions Real Estate, LLC, will always and ONLY represent your best interests when looking at any homes for sale, be it in Hanover, or any of the Upper Valley areas we serve. Call us today for a no-obligation consultation, or to have any of your home buying questions answered. 603-643-4800.