Why Buying a New Home is Better Than RentingMay 16, 2017
Listen up, renters. There’s no more waiting. No more “just looking.” It’s time to own your home rather than shell out thousands each year to live in a building that doesn’t belong to you. Here are four reasons why.
Personalized living spaces
Don’t like a wall color or a hanging fixture? Too bad. That is, if you rent your space. Unlike renting, where a lease usually outlines strict guidelines for altering apartment appearance, owning a home opens up possibilities for customization. The greatest example of this is buying a fixer-upper, in which a new owner purchases a low-priced home with the intention of renovating the property based on need or design interests.
However, many homebuyers–especially first-time homeowners–choose a move-in ready home because it requires the least work upfront. But after moving in, the ceiling is the limit to how you design your home, which is especially important if you’re considering growing a family, downsizing, or have a big old dog that needs someplace to sit.
Caveat: Exceptions may occur when dealing with a Homeowners Association (HOA), applicable building codes and other restrictions. For example, many times HOAs will have regulations regarding exterior and lawn appearance and how you can use your home.
More peace of mind
This isn’t to say that buying a home is a peaceful process; in fact, it can be a stressful experience. But once you become a homeowner, you enter a more certain world, one without worrying whether a landlord will raise the rent or waiting for someone to fix the dryer that’s been broken for weeks. You are in control now. If something needs repaired, you can take action right away. In fact, some new construction homes come with warranties that cover certain repairs for a set time.
Buying is (sometimes) cheaper than renting
It sounds too good to be true, but depending on your desired home price, your location, and current rent, you might pay more for a rental over a multi-year period.
For example, assuming you qualify for certain financing and interest rates, a home priced at $200,000 in the 77022 zip code becomes cheaper than paying $1,000 per month in rent in 10 years. In other words, if you’re a long-term renter, buying a house may be a better financial option over time
There are many variables to factor, though. See where you stand with this Rent Vs. Buy calculator.
According to a 2016 study surveying monthly mortgage payments in each state, the average cost in Texas is $1,271. That’s $154 less than what renters pay. Extend that trend through an entire year and the average homeowner is saving about $1,848. And while current mortgage rates are not as low as the previous year, they are still below highs recorded in 2006 and 2014, making limited cuts to comparative savings.
Similar to getting married, buying a home may provide useful tax benefits in the form of deductions for mortgage interest and property tax.
To be clear, investing in a home (or getting married for that matter) for tax breaks is not a sound financial solution, especially when these methods benefit higher tax brackets over lower ones. So think of tax benefits more akin to perks than life hacks.-
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