When it comes to the hard decision of renting vs. buying a home, it can be easy to overcomplicate things. When I bought my first home, my dad helped me by asking me these two questions:
- If you buy a home, would you plan to own it for 5-10 years?
- Can you afford a mortgage and other costs included in owning a home?
If the answer to these questions is “yes” – it’s probably the right time for you to consider buying. That’s because over time, most homes increase in value. And, there are other intrinsic values to owning.
Let’s look at a few benefits of owning a home and decide if these are important to you:
- If you own a median-priced home for at least 5 years, and your home appreciates (increases in value) at a conservative rate of 4% per year, you will have over $90,000 in equity. How long does it take you to save $90,000?! Meanwhile, you don’t take any money with you when you are done renting.
- You will be much more comfortable taking other big steps in life, like starting a family and engaging more with your community.
- You get to make your home your own. Creating a purposeful space that aligns with your goals helps you find success in more than just your living space.
- The nice thing about owning a home is that the only increase in your housing cost will come from insurance and taxes. Meanwhile, rents increase nearly every year. This fixed amount helps you maintain financial health and stability.
- If you sell your house in the future, in many cases you won’t pay any taxes on the “profit” you make on your home. Having a “side job” of fixing up your home and selling it to upgrade with tax-free profits may help you achieve your dream home sooner than later.
Buying your first home is a huge accomplishment. And if some day, you hope to own more than one property, the best way to learn is to get your feet wet and start working toward real estate ownership early.
Are you still considering the question of renting vs buying a home? Let’s discuss your long term goals and what might be the best path for you. Call me at 480-639-9640. I’d like to be your Realtor!
