I’m Single, Should I Buy A Home?

I’m Single, Should I Buy A Home?

Isn’t buying a home for married people? I’m single! The short answer is “so what”? Just being single doesn’t affect whether or not you should buy a property. Being married is not a requirement you know! All the same factors that go into any home purchase should be considered by the single buyer. The process is the same, the advantages are the same and so is the responsibility.

Stability

The first thing any potential home buyer should consider is their lifestyle. Are they ready to settle in a specific area for a few years? For tax reasons, you should be ready to commit to living in the property for at least 2 years. If you sell before that time, and there is an increase in value, you could be taxed for the profit. (Check with your tax professional for more information). Most home owners move every 5 to 7 years. If you are stable in your job or community then you might be ready to purchase a home.

Cost of Ownership vs Financial Gains

There are advantages and disadvantages of home ownership and how it relates to your finances. First you will notice that rents in any specific area are typically lower than the mortgage payment you’ll have to buy. You will also have costs of ownership which could include homeowner’s association, real estate taxes, insurance, up keep and maintenance.

While this might seem like buying a home is a bad idea financially, there are advantages as well. Home mortgage interest is one of the last good income tax deductions left. Talk with your financial advisor and/or tax professional to see what impact a home purchase will have on your income tax. You might be surprised to find that paying more in a mortgage vs rent can actually increase your take home pay due to a reduction of income tax.

Investment

Buying a home is an investment tool. Your home is an asset that could see healthy appreciation in value. Paying attention to home values and market trends will help you identify which areas are seeing the largest appreciation. A home purchase in an appreciating market could make that mortgage payment even more valuable to your financial situation. A single person can currently take up to $250,000 of profit on the sale of their primary home (after 2 years) without any income tax at all.

None of these advantages relate to your marital situation. They depend on your personal financial goals. Of course, if you are in a position where you are unsure about your permanent location, perhaps due to job opportunities, it might make sense to continue to rent. But if you have put down mental roots, then single or not, you might be ready to purchase a home.