Few days ago I was listening to a host of a radio show asking listeners what would they do if they won 10k dollars. The answers ranged from buying a jets ski to blowing it on a party, none of the listeners said pay down debt, invest in the stock market or save for a downpayment to buy a property. Immediately inflation came to mind. Do you know what quantitative easing is? It's the government printing money without any stop in sight, then flooding the economy with it. How does this affect you if you are buying a home? The more money is in the street, the more things will cost - in this case properties are going up in prices.
Here are 4 reasons to own your own property-
1- Tax Benefits - you will be able to deduct the interest rates from the mortgage in your income tax. This is one of the few tax benefits the government gives you, take advantage of it. Very few tax deductions are allowed nowadays, take advantage of the few we have.
2- Monthly payment (assuming you got a 30 year fixed rate mortgage) will not change for 30 years. This really matters because salaries, groceries etc usually go up with time. If your mortgage payment remains the same it means more money in your pocket. With time Rents will invariably go up, especially in high cost living cities and eventually squeeze every penny out of you.
3- No one will kick you out (assuming you pay your taxes/dues).
Picture this, you live in a rental building which just got sold to an investment company and you just got a letter to vacate your apt in the next 30 days, what would you do? This is not a made up story it is actually the story of a building here in Miami where the tenants some of which had been living there for more than 10 years, got a letter to vacate premises in 30 days.
4- Make a profit - as one of the greatest wealth building ways in the US (homeownership), property prices as data shows slowly but surely go up. If you end up selling, the profits you gained can be re-invested in another property without the government taxing you. Meaning you can get a better property without having to put any cash in it. For example you could buy a duplex and rent out one of the units while you live in the other unit. Essentially you will be getting paid monthly with little or no mortgage.
Bottom line, try by all means to own property, it pays off at the end.
Till next time,
JL
Disclaimer - This blog is meant purely for educational discussion of finance. It contains only general information about financial matters. It is not financial advice, should not be treated as such. The contents of this blog are not medical advice, for medical advice please talk to your medical provider.