5 Reasons why you should buy your house or apartment.
Updated: Oct 25, 2020
Many are worried about committing to a property and the long term implications this may have. Others are worried about a financial meltdown and the property value taking a hit.
I am here to tell you that buying is always better than renting; that is if you are planning to stay in that area for 5 years or more.
Who likes paying taxes? I would say, this is the number one reason to buy a house or an apartment. You will be able to deduct the interest of your mortgage up to $750k in principal. The way mortgages are set up is that you start paying the biggest amount of interest in the first half of the loan. This is of course a plus! Nowadays there are few ways to legally lower your taxes, THIS is one. If you rent, you cannot deduct any taxes.
Let's be honest to ourselves, if you did not think the value of your property would go up, you would not buy it. Properties tend to increase 1-2% per year in value; some years more others less. Over the years real estate has been shown to be a path to wealth building. Despite the 2008 housing crash, owning a property is still lucrative. Of course you have to be savvy and have an eye for neighborhoods which will appreciate in the near future. See for yourself this graph of property values;
3- Paying off principal (building equity)
As time goes by, the monthly payments you make will eventually allow you to own your property, something that renting will never allow you to do. You will have something to show for all those years of hard work.
As most of us know by now, over time rent WILL go up. Average rent in the US went up by 3.2% from 2018 to 2019, you can read more here.
Having a 30 year fixed mortgage means your monthly mortgage payments will not change. Your salary on the other hand will most likely increase over time.
Look at this graph from the US Census Bureau, it speaks of itself.
Being part of a community believe it or not, is a big deal. Children/Adults will foster relationships with neighbors. Mots of us remember the neighborhood we grew up with candid memories.
Hope you found this helpful. If you want more information on buying a house, be sure to check our buying a house tab.
Till next time,
Disclaimer - This blog is meant purely for educational discussion of finance. It contains only general information about financial matters. It is not financial advice, and it should not be treated as such.