The Decision: Buy vs. Rent (Home Buyer Series)
Buying a home is not for everyone. Whether renting is a better option really depends on many factors. Renting make sense for those who move frequently, or who don't want the responsibility and cost associated with buying and maintaining a home.
Good Rule of Thumb: Expect to spend about 1% of your home's purchase price each year on maintenance. So, if you're planning on buying a home be prepared to spend at least 1% on essential maintenance - or plan to spend more if you hire a professional to do all the work. And, don't forget to budget for nonessential home improvements.
Over the long run, owning a home instead of renting makes economic sense for most people - a great way to build wealth over time. Homeowners are legally entitled to write-off up to $100,000 a year in mortgage interests. Also, as a homeowner, the federal government allows you to take tax deductions for property taxes. And, let us not forget that as a homeowner you build equity as you pay off your mortgage and there is potential for appreciation in your home's value. Additionally, you'll have a place to call your own. Finally, if you are single, and you later decide to sell your home, you get to keep up to $250,000 (up to $500,000 for couples) in profits tax free.
Bottom Line: When it comes to whether you should buy vs. rent, buy a home when the timing is right for you, when you can handle the costs of buying and maintaining your home and when you plan to stay for a while.
Are you ready to buy? Buying a home using prudent borrowing practices is a sound way to build lasting financial security. When you're ready to get started or if you have any questions, please Contact Letitia Stevenson for your real estate needs.
This post is for informational purposes only and should be verified by a qualified tax professional. The information provided should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action on this information, you should consult a qualified professional adviser to whom you have provided all of the facts applicable to your particular situation or question.
Letitia Stevenson, REALTOR® | Licensed in DE, PA & MD |
Berkshire Hathaway HomeServices Fox & Roach, REALTORS®
(Formerly Prudential Fox & Roach, REALTORS®)
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