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| SHOULD I RENT? OR, SHOULD I BUY A HOME? |
| Does owning a home make sense for you? If you are presently renting or debating owning your own home, read on!
Some people are better off owning their own home than renting. This is because the costs associated with owning a home can return a greater benefit over time than paying rent. I will show you a simple example of how home-ownership can be an advantage for you. Let's say you were paying 1250/month for rent where you are now, or where you are planning to move. If you can afford a $1250/month rent payment, you might be able to buy a home in the $160,000 - $169,000 price range. As a homeowner, you are entitled to certain tax benefits that enable you to deduct some of the expenses associated with owning your home. For example you can deduct your mortgage interest and your property taxes on your Federal Income Tax. In some cases, you may also be able to get a refund of some of the state property tax that you pay. The tax benefit alone is not a reason to buy a home. The main reason to buy a home is to provide a place to live for you and your family. You can do this by renting. But over time, you would paying out rent and getting little value in return! So if you pay out 1250 a month in rent. Over the course of 5 years you will have invested $75,000 in your living space. (This assumes the landlord doesn't raise your rent). The apartment, house, or town home you rent does not increase in value and returns 0 on your invested dollars. As a homeowner, your home should increase in value over time. Let's assume you buy a home for $160,000 with 3% down at a rate of 7% with a 30-year fixed mortgage. With a modest increase in property value of 2.5% per year, if you stayed in the home for 5 years, you could have saved nearly $14,500 over renting. Let's say you stayed in the house 7 years. You could save over $32,000 over renting. It is apparent that the longer you stay in your home, the more equity you will have. So, if you are a short-term dweller, home ownership is not for you. But if you are looking to live in one place for an extended period of time. Owning your own home makes Dollars AND sense! If you have questions about home-ownership, feel free to call me. I can answer your questions and conduct a special home-buyers analysis to see if owning a home is right for you! CALL 763-639-5379 for a FREE consultation! |