Tag: home ownership

Home Ownership Pros and Cons

home ownership advantagesOwning a house is very different from renting. Understanding some of the key benefits and drawbacks of buying a house can help you decide if this is the right approach for your family. From the amount of money needed upfront to annual tax savings and even maintenance costs, here are some of the home ownership advantages and disadvantages.

Home Ownership Advantages

Build Wealth: For most of us, our home is our largest investment and one that increases in value over time. When you purchase a home, you naturally build equity as you make improvements and pay off your mortgage.

Tax Savings: The property tax and interest you pay on a home you own is tax deductible. This can add up to significant savings for you each year at tax time. If you make green improvements to a home you own, you’ll not only reduce your carbon footprint, you’ll get additional deductions as well.

More Control: From the ability to paint your rooms whatever colors you like, have as many pets as you want and even decide if you want to upgrade your exterior, when you own the home, you have creative control. You also don’t have to worry about a landlord selling your home before you are ready to move.

Privacy: Perhaps you don’t like the idea of a nosy landlord. You may simply want your own space that you don’t have to answer to anyone else about (except the bank). Either way, owning a home is the right way to go.

Advantages of Renting

No Maintenance Costs: If the air conditioning breaks, the fridge stops working or there is a plumbing fail, you’re not responsible for the repair work.

Lower Upfront Cost: Depending on the mortgage product you are interested in, renting can be less expensive up front than buying. Some loans, including VA loans are equal or even less than the cost of renting.

Flexibility: That downtown location may have seemed like a great idea when you rented the house. But now, a year later, you’re ready to move on. As a renter, once your lease ends, you’re free to move. A house will have to be sold or rented out before you can move on.

Affordability: In some markets, you can get more house or space for your money when renting. Buying could result in a higher monthly payment.

Bundled Services: Some rental locations provide utilities and other services, from trash pick up to lawn care. These additional services can save you time and money.

Home ownership advantages at the right time will ensure that you can build wealth and thrive in a home you own. For some people, renting may be the best option for now. It’s a good idea to regularly review your personal needs and goals. This process can help you decide which model is best for you and help you make the best possible decision for yourself and your family.

Home Ownership for Veterans – Is It Worth It? Depends…

Home OwnershipTo purchase or not to purchase? That seems to be a consistent question among U.S. veterans. When frequent relocations have been such a regular part of life, it can sometimes be difficult to understand the benefits of home ownership.

So the question is, is owning a home worth it? The answer is – it depends. Determining whether purchasing a home is best for you depends on several factors. Here are some things to keep in mind as you contemplate becoming a home owner.

Long-Term Residency

Home ownership is a great option for people who plan to stay in the home for several years. It takes roughly 5-7 years to break even on a home purchase, after including the costs to purchase the home, and sell the home. If you sell too early after purchasing, you could end up losing money.

In general, housing prices tend to go up over the long term. But, if you plan on moving in a year or two, renting is probably a better financial decision. When you purchase a home for short-term occupancy, you run the risk of short-term market fluctuations decreasing the selling price of your home. If you are only holding on to a home for a few years, you are more susceptible to market turns and might have to sell at a loss.

Home Ownership Tax Considerations

Owning a home is a great benefit when tax season approaches. All the money you have paid towards interest in your mortgage payments is considered a tax write-off. That means you can deduct the amount of interest you paid from your gross income, which effectively lowers the amount of taxes you’ll be required to pay. For some people this is a huge benefit, and could be a great reason to consider buying a home.

However, if the amount of interest you’re paying doesn’t exceed the standard exemption amount, currently $6,100 for individuals and $12,200 for married couples filing jointly, you may not see much benefit.

Maintenance and Repairs

Many people want the ability to customize their home as they see fit. From renovations to landscaping, many people love having the final say in the look and feel of their property.

With so many older homes on the market, it can be undesirable to rent a home that does not appeal to your tastes. On the other hand, many people choose to rent simply because they don’t want the financial commitments and time requirements associated with maintaining a property.

When you purchase a home, you’re responsible for everything – from a leaky roof, to a broken water heater, to a flooded basement. If you are handy around the house or don’t mind paying for a professional handyman, home ownership is a good option for you. If you feel more comfortable simply calling the landlord when something goes wrong, you probably should consider a rental property.

Owning a home comes with many advantages, but it may not be for everyone. Do your research to determine which path is best for you.