Buying a home is a dream come true for everyone. However, there are challenging experiences that could surface with the plans – out of which are the numerous options to consider.
Therefore, making the right choice would involve considering the better and more suiting option between renting a home and owning a home. But the truth be told, buying a home could be expensive – not forgetting recurring property taxes and insurance payments, and other forms of expenses.
However, with these huge expenses, owning a home comes with great benefits. Have you considered that the value of your home could be worth more than the purchasing price someday? And the huge profit potentials can come on a platter of gold to you.
There is a wide range of home-buying benefits and opportunities. If you are stuck between buying a home or renting one, here are some of the reasons why you should rather consider buying one:
It’s An Opportunity For Passive Income
Before buying a home, you need to decide on what you intend to use it for. Some people opt for renting it out for passive income – even while living there. With this, a homeowner can completely cover their mortgage.
For Socializing And Privacy
Owning your home will save you from several interruptions and inspections from the landlord. You are in the best position to set your parking arrangements, enjoying your pets not minding restrictions or payments of some extra costs.
However, you must respect the privacy of neighbors concerning noise level and some other things. As a homeowner, you have enough space, no shared walls, and adequate leeway than that in an apartment. So, if privacy and socializing is your priority, buying a home is better than renting.
Helps To Build Equity
As a homeowner, you build equity at every point you make payment for a mortgage. This implies that your property will be high in value beyond what it’s owed on it. Therefore, you have enough cash when you sell or a better financial statement over a while.
Besides, the equity can serve as a personal loan to cater for some emergencies such as unemployment, hospital bills, etc.
So, it’s better to have your home equity grow than paying rent to someone and helping them build their equity. Make that work by paying your mortgage and not someone’s.
Enjoy Tax Benefits
Buying a home provides you with the opportunity of enjoying some tax deduction for interest and property tax paid yearly. This will always be more than any property tax refund that may be available to a renter.
Are you paying private mortgage insurance (with a down payment of not up to 20 percent)? If yes, then you are qualified for another deduction there too. Besides, work-from-home individuals with a designated area for work can also enjoy some tax deduction.
You Can Customize Or Improve Your Home
The fact that it’s your home gives you the power to do anything on the property. You can choose to paint or leave it without paint, decide on where to use as your closet, etc.
Also, when you have issues with the house, you can get it fixed at your convenience and not rely on the landlord. You can do all the necessary work on the property at your schedule because you own it.
It Is Cheaper To Buy In The Long Run
You do not get back the rent you pay – paying for a property that does not belong to you will mean that you don’t build equity. This means you are helping your landlord build wealth and securing his future.
When you own a home, you are building a future. Though buying a home could be expensive, but looking at money involved with renting, buying a home would be cheaper in the long run.
Here is a scenario – instead of paying a rent of $800 per week. You can save about $2 every week if you pay the interest and principal on a mortgage of $800,000 which will amount to about $208 yearly.
Collateral For A Second Mortgage
Since your home is an investment, it can be used for taking a second mortgage in which you can always draw from accumulated equity in your home.
The second mortgage is a type of loan that is added to your current mortgage. Oftentimes, it is used to service financial tie-ups or emergencies.
Buying A Home Helps In Wealth Building For Another Home
When you own a home, you are likely to begin to think of purchasing a second home. This move expands your properties and stream of income. When you own a home and sell at a profit, you would be able to afford another house. The value of a home appreciates and not depreciates. A home could gain 10% in value over a year, so, you sell at a price higher than the initial cost price of the property.
In Preparing To Own A Home
It is usually a great decision to buy a home. However, you would have a down payment of about 20 percent of the property’s total cost. Besides, it can go for as low as 5 percent or even 0 percent with a good guarantor.
Before setting out, you should start by saving up for your dream home – this is important because it would help you make a good offer with stiff competitions from fellow property buyers. Also, you need time to prepare because you don’t know when your property of choice can be available to you.
Besides, you could check your eligibility for a loan and the amount that will be available to you. So, with this, you can plan your budget and cut down on other irrelevant and big expenses.
There are several reasons why buying a home is better than renting one. It does not only provide an opportunity for a passive income, but encourages socializing and privacy builds equity, enjoys some tax benefits, and improves and customizes your home.
Also, it could be cheaper in the long run and serves as a tool for a second mortgage. So, it’s time to decide whether to buy or rent – but you should consider the benefits associated with buying a home and not renting.