To 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.
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.