Both renting and buying offer certain important advantages. But at some point in life, nearly every person will face the question of whether it makes better financial sense to rent or buy their own home. If this describes you now, this post will help you learn more about five key benefits you can only get when you buy a home.
You Can Build Equity
Equity is a term you will begin to hear a lot when your thoughts turn from renting towards buying your own home. Equity refers to the accumulated value of your home and property over time. Investors often buy homes hoping they will appreciate (increase) in equity value so they can later sell the home at a profit. You will never be able to build equity by renting your home, but you certainly can when you buy a home.
You Can Call the Shots
Within the limits of any HOA (Home Owners Association) restrictions, you are free to call the shots when it comes to interior and exterior design and decor. If you want to plant a tree, you can. If you want to repaint your kitchen, you can. Unlike when you rent, there is no landlord telling you what you can and can’t do when you own your own home.
You Can Control Your Costs
You can make energy efficient modifications that save you money on your monthly electric bill and then take the energy tax credits to offset that cost. You can choose your own vendors for all your services or even discontinue them if you prefer. You can choose energy efficient fixtures and appliances to control water costs and install energy efficient draperies and blinds to keep your home’s temperature more stable.
You Can Save on Your Taxes
In addition to energy tax upgrades credits, the IRS provides other tax breaks, such as the ability to deduct mortgage and interest, for any homeowner who itemizes on their tax return. This can give you additional deductions to offset what you owe the IRS each year.
You Can Use Your Home to Earn Money
If you are investment-minded and have an interest in real estate, you can rent out part or all of your home to generate income each month. You may even decide to use part of that income to purchase additional properties that you can then rent out.
Buying your own home is a big decision, but it can have equally big payoffs. By understanding these five key benefits of buying rather than renting your home, you can begin to take greater charge of your financial future, lower your costs, earn income and save.