While rental costs continue to skyrocket, mortgage interest rates remain at all-time lows. Renters are facing the big question, “Is it better to continue renting or take the next step and become a homeowner?” Here are our Top 5 reasons why it is better to purchase a property than to continue renting.
1. Fixed Mortgage Rate
When purchasing a home, buyers often have the option of agreeing to a fixed mortgage rate plan. This is an ideal time to lock in a rate and this can be exceptionally beneficial when you lock down a good rate. If you do, your interest rate cannot increase over time. Locking in a low monthly payment that will never increase allows you much more stability than renting and dealing with often arbitrary annual rental increases imposed by today’s landlords.
2. Secondary Income
While you may not be sure if you want to stay in the same neighborhood or house for the rest of your life, if you choose to move (for work, family or pleasure) you still OWN the house. This allows you the option to become a landlord, yourself. You can use the rent your tenants pay as a secondary income or to make the monthly mortgage payments while you wait for the value of the home to make selling worth your while. And on that note. . .
3. Appreciating Investment
The housing market is ever changing. Sometimes the market is up, and sometimes it is down. Historically, over time real estate will appreciate. When purchasing a house, you are ultimately purchasing a great investment that could potentially double or even triple in value in the future.
4. Tax Deduction
When tax season rolls around and you are filing your taxes for the year, you have the ability to deduct mortgage interest payments. As a homeowner, you can also deduct eligible expenses such as home improvements and real estate taxes. Your tax savings as a homeowner is significantly better than as a renter. It’s possible to get much larger tax refunds at the end of the year.
Owning your property means you have the freedom to customize your space however you’d like with décor, construction, and overall home improvements. As the homeowner, you also have the freedom to stay as long as you want and make your own rules. As long as you’re renting, you’re living under somebody else’s rules. Most homeowners would agree that being in charge and having this this kind of freedom is a wonderful thing.