When Does Buy A House Become More Economical Than Renting A House? Given the fact that the market conditions keep on changing on a yearly basis and the recent housing market bust has got people thinking about whether to rent or buy. There's no doubt that buying a home is one of the biggest decisions anyone can make in their life, any home seller will tell you that. Many home buyers often times wonder if they are taking the plunge at the right time, after all, the amount that has to be given upfront is not small by any means. While there are many benefits to renting a home, there are many disadvantages as well. So how do you decide when buying a house becomes more economical than renting a home? Also, read: What Do Economists Think about Buying Vs Renting a House?
Guaranteed Monthly House Payments When you are on a rented accommodation, a landlord has the freedom to increase your raise whenever a lease expires, and that too as often and by as much as he or she pleases. However, as a homeowner, you know for sure that you have to pay a certain, locked in, amount for the next 30 years. You don't have to worry anymore about fluctuating rents and can create your monthly budget knowing well that your interest payments are not going to rise in the long term. Brian Belcher real estate agent further adds that the bonus of being a home buyer is that the money you spend on a monthly basis towards your mortgage does not go into your landlord’s pockets. It goes towards your homeownership. House is an Appreciating Asset
Owning a house will provide you with financial stability and with a valuable asset for life. A top realtor says that by purchasing a house, you will have an asset that will appreciate many times over in value, depending on market conditions. This makes your house one of the best investments to make and also a way to establish a strong financial foundation for your kids as well. Get Tax Benefits Many of the expenses that are related to being a home owner are tax deductible. These include expenses such as taxes and accounting costs and the biggest deduction of all is of course the interest that you are paying on your mortgage. As the expenses become tax deductible, you get to keep more of your hard-earned money for yourself instead of having to give it up to the landlord every month. Modify your Home as you want Every renter has at one point thought of painting a room or making changes to the house as per their wish. However, this is not at all possible in a rented accommodation. It is, however, very much possible in your own home. You don't need any permission to modify your own house. You can paint any room any color, replace any cabinets you want, knock down a wall that you don't want, and basically carry out changes to fill your heart's desire. Cheaper to buy your own Home In spite of the fact that there is an upfront cost of paying the down payment and closing costs involved, buying a house is still going to be cheaper in the long run. The monthly interest of your mortgage still comes out to less than paying rent in most of the major cities in the world. As mortgage rates are also currently low, it is definitely an economically wise decision to purchase your own home rather than continue to rent. Source: https://fastexpertinc.jimdo.com/2017/10/09/when-does-buy-a-house-become-more-economicalthan-renting-a-house/