The age old debate of whether it's better to buy vs rent a home can get quite intense. Whether you think you’ll make more money on the stock market or you think property is the best investment, we challenge you to read this blog and think long and hard about the points we make. There are some undeniable reasons to become a homeowner for the first-time, and some good reasons for those second-home buyers to bite the bullet and buy another property.
Why should you focus on buying vs renting? I am sure over the years the thought has crossed many renters minds as to when the best time to make a home purchase is. Should you wait another year or two to save up more money or should you take what you have and get into the market as soon as possible? What about buy vs rent when considering a vacation home? Should you just rent a home every time your visit or is this an amazing opportunity to own a second-home and let the renters pay your mortgage?
The answer is going to be different for everyone, but the general consensus is to get into the market and start building for your future. The following are 6 reasons why we feel you should consider purchasing your first or next home rather than rent it:
1. Building Equity
Building home equity is a key component to your overall net worth. Why would you pay rent to someone else when you can put that money into your own home. Not only will you be paying down your mortgage each month, but the value of your home will continue to increase. Of course the market is going to fluctuate, but with inflation and an increase in the real estate market many home owners have made large returns on their property investments.
If you are considering at vacation home, then homes in Okoboji are a lucrative investment. With beautiful lakefront property, golf course homes, and stunning townhouses and condos, you’ll be buying a place that is more than likely a renters dream! Once you pick a home and do the initial set up, the renters will essentially be paying all of your bills. Fast-forward 5, 10 or 15 years down the road when you decide to sell, you’ll have increased your equity by having someone else pay your bills. Since you own the home, you can decide when you want to use it for personal use. This is definitely having your cake and eating it too!
2. Consistent Monthly Payments
For first-time buyers, knowing that your monthly bills are consistent will certainly reduce your stress level. Rent can fluctuate dramatically, whereas locking into a monthly mortgage contract will hold your payments exactly the same until the end of the term. This stability will allow you to budget your life accordingly. If this is a second-home, then fixing your payments each month will allow you to budget your investment accordingly. If you decide to rent the home out as a vacation rental, you should be aware of peak rental times and variations in rental income. With a consistent monthly carrying cost, you won’t have any surprises as your monthly bills will be the same.
3. Primary Residence Tax Exclusion
A tax-free gain is applicable for your primary residence. This means that you do not have to pay capital gains on your home when you sell it, if it is your primary home. You are also able to write-off your mortgage interest each year on your personal income taxes. You’ll be building your equity that is tax-free when you sell the property. If the home is not a primary residence, then you’ll pay capital gains when you sell the home. However, you’ll also be able to expense any costs related to the house each year, which is a very good thing indeed!
4. No More Landlords
Dealing with landlords can sometimes be awkward and difficult to handle. You have to rely on them for all the housing repairs and maintenance, which often only gets done when they get around to it. Owning your home puts you in charge. If something goes wrong then you can fix it straight away and move on with your day.
5. Your Basic Needs are Met
Shelter is one of our fundamental needs. By you owning your own home, you are in the drivers seat. You decide when you leave and where you are going to go. It puts you in a completely different position. Once you buy your first home and have that precious equity, it becomes your safety net and offers you and your family peace of mind for the future.
6. Pride of Ownership
Pride of ownership is key. You can customize your space anyway you like. You own the home and what you do with it is your business and no one else’s. Paint the walls bright pink, plant as many flowers as you like, and renovate until your hearts content, you’re in control of making changes to your home!
Does life in Okoboji sound like the right fit for you and your family? Looking for more information or ready to begin your home search? Contact the team at Hoien Realty, your Okoboji area experts, today!