It’s the first of the month, and for many that means rent it due. No better time to think about the advantages of home ownership.
Unfortunately as I write this the tax benefits that have existed for homeowners are being debated and may be taken away. I will spare you all my opinions on this matter, get out there and vote your conscious. Note to self, do some homework so I can post about this in greater detail.
Leaving these tax benefits aside, there are still advantages to home ownership.
There is an end in sight.
Rent is perpetual. It will never end, and it usually goes up. A mortgage in finite, it WILL end. If you act responsibly and get a 30 or 15 year fixed, your monthly payment will stay the same. Think back to what you were paying in rent 10 or 15 years ago, how much more are you paying now. Imagine if that amount had stayed at that lower rate, it adds up. Here is where the nay sayers and cynics will bring up property tax. It’s true, you will always have to pay a monthly (or quarterly depending) bill, but it is nowhere near what rent would be. So let’s just embrace the cold hard truth now, you will always have to pay a monthly fee for shelter.
It’s the first step.
When you buy a home you are investing in yourself. There will come a time where, either through the strength of the housing market or simply paying off the mortgage, you will gain equity in your home. That equity can be used to leverage the purchase of rental properties. And this is where the game changes. Other people will be paying the mortgage will that new property builds equity. Which can also be used to… you guessed it, buy more rental properties. Now you’re dealing with wake up money. Not to mention a whole new set of tax benefits I will get into in a different post.
So now the downsides of home ownership. Number one concern I hear is maintenance. Sure, it can be a pain when you’re the one who has to deal with a busted water heater. Well, there is good news, it’s called a home warranty, and I won’t let you buy a home without one. You pay a small fee when you purchase the house and effectively creates the same dynamic you’re used to in your rental. The second drawback, flexibility. Now there is no way around this one. If your life/career has you bouncing from state to state, ownership MAY not be the best idea for you. However there still MIGHT be solutions through leasing depending on the specifics of your situation.
My cousin said it to me like this, “home ownership is the way regular guys like us become wealthy” and I think he might be right. It’s not a get rich quick scheme, and you will probably have to make some sacrifices along the way, but it is a way.
If you’d like any more info on any of this, please just ask
Always happy to help