Buying or Renting find options that work for you.
Reasons to Buy
Equity
When paying rent the landlord’s mortgage or equity is going to their bank account but with a home mortgage there is an increase in home ownership with every payment. If inhabiting the property for more than five years the cost of purchasing the home is offset by accrued equity and increases the house value. Should the equity grow more than 20%-to-80% Loan-to-Value ratio then the ability to borrow against equity in the home is available. With caution, this can be used to gather capital for major purchases. In the event of interest rates dropping, a decision to refinance the mortgage can lead to favorable rates or if the mortgage is already paid then it becomes an option to borrow against equity in the home for funding major purchases –like a second home or a child’s education.
Tax Deductions
Uncle Sam gives a bonus to deduct mortgage interest and property taxes. Plus, under certain requirements, the IRS will not apply a “capital gains” tax on profits made from selling the home. If living the home for at least two years out of five a single owner can keep $250,000 while a married owner can keep $500,000 in profit when selling the home. Additionally, taxes can be reduced under a work-from-home situation applying it as an office with utilities.
Creative Freedom
Paint, hang up pictures, landscape there are no limitations in creating that dream home atmosphere when owning the home.
Maintenance Control
Approaching maintenance allows independent or contract work. Meanwhile paying a monthly fee while in a condominium or homeowners associations allows maintenance to be covered by the association’s contractor.
Reasons to Rent
Flexibility
Renting allows exploration before any long-term commitment to home ownership. This allows time to research and discover the right land, neighborhood, or location.
Career
Planning a move or changing jobs around several different areas or located somewhere else in the county? Renting will allow the freedom to move around.
Income
Expecting income levels to change can influence borrowing ability and impact the ability to pay off a mortgage.
Credit
Creating a history of on-time rental payments can help build credit to qualify for a mortgage down the road.
Maintenance
The landlord is responsible for maintenance clearing the worry of solving problems first-hand.
Utilities
Often times water, sewer, garbage, heat, or water get covered by rent costs.