Why Would You Rent If You Can Buy?
As someone who is first time home buyer, the idea of buying a house could be terrifying. It could seem like a goal for the future, or when you have enough money saved.
But what does that mean? Saving enough for a down payment? Or securing enough money where you can live comfortably in a home?
This is an answer that puts many first time home buyers off from buying a house.
Agent ReVa was developed for first time home buyers to empower them through this important decision. We believe in giving you all the information you need to make informed decisions. As frightening as the thought it may be for some, owning a house has many benefits. Here are just a few:
1) Buying a property helps build equity
Home equity is the portion of the property that you actually own until you have fully paid off your entire mortgage or loan from a vendor. Until then, you technically own only a share of the home’s value. Each time you pay for your mortgage, some of the money is going towards building your equity and some towards the interest. When your mortgage is paid off, all of your payment has gone towards paying off the house – which then you fully own. In contrast to paying rent, where your money is not going towards any equity or property you will own but instead to your landlord’s mortgage.
2) You develop healthy money habits
Buying a house encourages you to manage your finances and make smarter financial choices. You will have a responsibility to pay off your monthly mortgage and start budgeting around that. It helps you prioritize how you should be spending your income; which is an essential skill to learn. Buying a property will force you to do exactly that, and keep you responsible for your financial situation.
3) It saves you money in the long-term
Eventually, your mortgage will decrease as you pay your loan off. At the end of it, you will have a house in which you just pay for utilities and other essential services. If you were to rent for a long-term period, you will have an increasing rent payment as long as you live in the home. Depending on the property you bought, you may end up paying more money when your rent than you have to pay your mortgage on a monthly basis. Let us not forget, homeowners can generate some rental income and can also deduct mortgage interest on their federal income taxes!
4) More value in owning a house than renting
When you buy a property and make monthly payments on the portion of the house, you still get to maximize the use of the house. You can decorate it any way you want, do anything you like to the property. With renting, there are landlord’s rules you have to worry about and avoiding permanent changes to it. You also have to be careful as certain damages could cause you to lose your down payment for some rental properties. For some extra cash, you can also rent out an extra room in your house, which may be difficult to do in a property you are renting out.
An asset’s values increase over time. Providing you choose a house wisely, your investment should see some financial advantage in value in the long term. This also allows you to retire without having to worry about paying rent or a monthly payment on a house. In case of emergencies, you can always sell your house and hopefully get more money than you paid for.
Even though the sum may seem large at first, it is a valuable choice to make that is going to change your life. If you are not ready to purchase a house and would like to take time to do more research or even save some money, download the free guide that will help you step-by-step to get you closer to owning your own property!
Ultimately, whether you decide to buy or rent is your choice, but If this has convinced you to want your own property, then we are here to help guide you through the process by creating your own personalized home buying action plan in a few easy steps! Click here