Rent or Buy? What Is the Best Choice? Buy!

Rent or Buy? In our first blog on this topic, we looked at the reasons why and situations where renting a property might be the best choice. In this blog, we will look at the reasons for and advantages of buying a property.

There is no question that the “old school” line, which people have heard from family and friends since they were young, is that buying is the best way to go because you are building equity. There is nothing like buying a property, especially today with low interest rates. Whether you rent or buy, you have to make that monthly payment, so why not have the added benefit of building equity at the same time.

The value of real estate will generally go up in the 5-6% range every year. The more expensive the house, the more your property value will be going up. It’s like an automatic savings plan, even though it may be a 15 or 30-year mortgage.

If you want to actually pay less on the home loan and can afford it, a 15-year mortgage is the way to go. The payments will be a little higher but the amount of interest you pay will be less so more money will go toward the equity in the house. And, if your property allows you to have rental income, you can reduce most or all of your monthly payment while continuing to build equity.

At the present time, the interest you pay on your mortgage is tax deductible while monthly rental payments are not. For property owners, I hope it stays that way. Keep in mind that for financial or legal advice concerning your specific situation, you should always consult your CPA or legal professional.

Another advantage to owning a house is your ability to upgrade the property and knowing that the money you put into the upgrades is for your benefit, not someone else’s. Upgrades can also increase the value of the property.

There is nothing like privacy and the pride of ownership in your own home. The day you buy a property, there is no greater feeling. Nothing and no one can make you feel better. Even someone with a ridiculous mortgage, is happy: “Wow, we closed on our property!!” Yeah, now you owe $5 million but everybody is so happy. When you sell a property and get that check, there is a certain excitement about that, too, but in my experience, it doesn’t really compare to closing the deal and taking ownership.

If you want to experience that excitement and pride of ownership or if you need advice regarding your particular situation, please give us a call. We can help you change from a renter to an owner and put a smile on your face.