If you’re debating whether you should become a homeowner or not, here are three reasons why it makes more sense to buy instead of rent:
3. You can build wealth. At the end of the day, you’ll either pay your landlord’s mortgage or your own. Paying your mortgage is a key principle of building your own wealth over time.
2. You can enjoy tax deductions. There are several you can take advantage of, including the mortgage insurance tax, property tax, and the interest on the mortgage itself. These deductions go a long way in reducing your taxable income and saving money in the long term.
1. You gain leverage. For example, if you bought a $300,000 home with a 5% mortgage, your down payment would be $15,000. If that same home appreciated by 5% year over year—a reasonable level of appreciation in a normal market—it would be worth $15,000 more in just a year. This would give you a 100% return on investment. There aren’t many other places where you can receive a 100% return on investment, which is what makes leverage a powerful investing principal.
Obviously, everyone’s situation is different, so if you’d like to talk more about this topic or you have any other real estate needs I can take care of, don’t hesitate to reach out to me. I’d love to speak with you.