To some, investing in real estate is daunting, but once you look at the benefits of owning a home, you can’t help but make a move to test the waters. Fixpads can help you become a homeowner and move-in fast to a freshly renovated and affordable home Considering the lifestyle and financial prospects, owning a home is more appreciated than renting one!
Here are a few reasons why people choose to own a house.
Owning a home gives you a liberty to manage it as you please. You can paint the walls any way you want it, customize floors and walls, or put a new chandelier in the dining room without the permission and hesitation from the landlord. And every time you make an improvement, the value of your home increases.
Owning a home is an actual investment; it’s an asset with a value that doesn’t drop. Most of the time, the value of a house rises faster than the stock market. You can live the way you want and still make a profit when you decide to sell it. For example, if you invest $20,000 in the stock market, you may gain $1,854 on top of your $20,000 with 3% appreciation after three years, and if sold, you’d pay taxes on money earned.
On the other hand, if you buy a $200,000 primary residence with a $20,000 down (10% down payment) and it appreciates 3% per year for three years, you are looking at $18,545 on top of your $20,000 invested. If you choose to sell the house, you’d be exempt from paying taxes on money gained.
Homeowners have the leverage to deduct mortgage interest and property tax while filing tax returns every year. For instance, if you purchase a $200,000 home with $20,000 down, a monthly mortgage payment will be around $1200 (depending on the interest rate), and it includes property taxes, PMI and insurance. You can count on tax deductions for mortgage interest and property taxes to be around $215 per month. So if we subtract $215 from the total monthly housing, your after-tax housing cost is $985 ($1200-$215). These significant savings can often make owning the house cheaper than renting.
With a fixed mortgage rate, your mortgage payment will never change. When renting a home, your rent will most likely rise yearly. You may be forced to relocate if the cost of renting goes over your budget.
When you pay your mortgage, that payment is consequently creating equity in your home. For example, your average pay-down per month on $180,000 mortgage in the first year is $282, the average in the second year grows to $292. Monthly pay-down increases annually, and it’s your investment in the house, creating a long-term benefit. On the other hand, if you keep renting a home, the total payment goes to the pocket of your landlord, providing no investment and no future profits.
We are excited to see more renters turn into owners with Fixpads’ great deals in rural America. It’s for you to decide if you want to buy a house, or keep renting and spend thousands of dollars paying someone else’s mortgage while building their wealth. Stop wasting money on rent and move into your own home with us.