Deciding between renting or buying a residence can be a difficult decision for one to make. There are benefits for both options, depending on what stage of your life you are currently in. In general, the benefits of purchasing a home -- economic, mental, and emotional -- greatly outweigh those of renting. Renting provides residents with the flexibility to move whenever necessary and can also provide the tenants with lower monthly payments than buying. Despite this, the benefits of buying a house tend to greatly outweigh those of renting.
Economic Benefits
The first thing to consider about purchasing a house is the potential to reap many economic benefits with this investment. A homeowner will profit from several tax incentives, such as property tax and mortgage interest deductions. First-time home purchasers will see that their real estate property taxes are fully deductable, and those with a mortgage balance that is lower than the home's worth will benefit from a fully deductable mortgage interest.
For homeowners who have resided in their houses for at least two out of the past five years, there is a capital gain exclusion law that allows them to exclude up to $500,000 of earnings from the their capital gains. This also equates to lower taxes for homeowners.
Real estate also has a trend to appreciate in value over the years. Unlike a car, whose value decreases with the passing of time, the worth of your real estate should go up in a constant manner (despite certain dips in the real estate market).
Finally, each time you make a payment on your home, you reduce your mortgage by a certain amount. This means that with every payment, you increase your equity. Now that you have home equity, you can also take out a home equity loan to pay for other necessities, such as education or medical bills.
Emotional/Mental Benefits
When you purchase a home, you gain the ability to proudly announce that you have a place of your own. You can do anything you want with your house -- design it as you feel fit, decorate it as you please, and landscape the outside however you want. You also have collateral to do things such as take out a home equity loan, meaning that you have more of a sense of financial security. This helps build confidence in your financial standing and ability to support your family, if you have one.
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If you would like to learn more about the benefits of purchasing a home, please take the time to visit http://carvajalgroup.com/
Joseph Devine
Article Source: http://EzineArticles.com/?expert=Joseph_Devine
1 comments:
The advantage of buying a home is clear on people who are thinking of long term investment, owning their own place allows them to personalise their property.
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